Edmont Hotel Co. v. Commissioner
United States Tax Court
The taxpayer, a solvent corporation, purchased its own bonds by direct negotiations with bondholders at a price equal to half of face value. Held: (1) The amount of discount on those acquired from a closely connected seller was a gratuitous forgiveness of debt, not taxable as income. (2) The amount of discount on one bond acquired from a seller not shown to have had personal or business relations with the taxpayer was taxable as income.
1Opinion of the Court
OPINION.
Johnson, Judge:
The Commissioner determined deficiencies of $4,-615.04 and of $2.32 in petitioner’s income and declared value excess profits taxes, respectively, for the fiscal year ended August 31, 1943, in part by adding to income reported a gain of $10,000 determined realized by petitioner’s acquisition and retirement of its bonds at less than par. Petitioner contends that the bondholders’ surrender of the bonds to it for less than face value was a gratuitous forgiveness of debt and that the amount forgiven is not taxable as income. The case was submitted upon a stipulation and…
2Cases cited6 opinions
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- Helvering v. American Dental Co.Supreme Court of the United States · 1943
- Pancoast Hotel Co. v. CommissionerUnited States Tax Court · 1943
- Liberty Mirror Works v. CommissionerUnited States Tax Court · 1944
- Jacobson v. CommissionerUnited States Tax Court · 1946
1 more not listed; retrieve them via the Exa API.
3Cited by6 opinions
- Colonial Sav. Asso. v. CommissionerUnited States Tax Court · 1985
- Warner Co. v. CommissionerUnited States Tax Court · 1948
- Colonial Sav. Asso. v. CommissionerUnited States Tax Court · 1985
- Edmont Hotel Co. v. CommissionerUnited States Tax Court · 1948
- Warner Co. v. CommissionerUnited States Tax Court · 1948
1 more not listed; retrieve them via the Exa API.