Elbert v. Commissioner
United States Board of Tax Appeals
1. Held, the facts showing that the several steps were but parts of an integrated transaction agreed to in advance, petitioner is not entitled to deduct interest paid on a promissory note given by her to her husband and herself as trustees of a trust established by her for her daughter, the note being given to evidence an alleged loan to her by the trust. 2. Held, petitioner was not engaged in a trade or business and is not entitled to deduct as ordinary and necessary…
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1. Held, the facts showing that the several steps were but parts of an integrated transaction agreed to in advance, petitioner is not entitled to deduct interest paid on a promissory note given by her to her husband and herself as trustees of a trust established by her for her daughter, the note being given to evidence an alleged loan to her by the trust. 2. Held, petitioner was not engaged in a trade or business and is not entitled to deduct as ordinary and necessary expenses a prorated share of the cost of maintaining an office.
1Opinion of the Court
*689OPINION.
Van Fossan:
Reduced to its simplest terms, the first issue may be stated to be: Were the several steps taken by petitioner and her husband, i. e., the formation of the trust of which petitioner and her husband were trustees, the transfer to it of $300,000, the “borrowing” three days later by petitioner of all but $2,000 of the corpus of the trust, the giving by petitioner of a demand note without a fixed date for payment of either principal or interest — were these all steps in a single integrated transaction by virtue of which petitioner retained all the valuable incidents of…
2Cases cited2 opinions
- Higgins v. CommissionerSupreme Court of the United States · 1941
- United States v. PyneSupreme Court of the United States · 1941
3Cited by12 opinions
- Karme v. CommissionerUnited States Tax Court · 1980
- Elbert v. JohnsonCourt of Appeals for the Second Circuit · 1947
- Gordon v. CommissionerUnited States Tax Court · 1985
- Woodward v. United StatesDistrict Court, N.D. Iowa · 1952
- Wilken v. CommissionerUnited States Tax Court · 1987
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