Zimmerman Steel Co. v. Commissioner
United States Board of Tax Appeals
At the end of 1935 petitioner owed the Bettendorf Co. $519,278.58, evidenced by notes payable, for advances made to it from 1921 to 1933, inclusive, plus interest accrued, not evidenced by notes, amounting to $315,951.32. The last payment on the indebtedness was made in 1929. At the end of 1935, 1936, and 1937 petitioner's liabilities exceeded its assets in substantial amounts and its operations for 1923 to 1937, inclusive, except 1928, 1929, and 1930, resulted in net…
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At the end of 1935 petitioner owed the Bettendorf Co. $519,278.58, evidenced by notes payable, for advances made to it from 1921 to 1933, inclusive, plus interest accrued, not evidenced by notes, amounting to $315,951.32. The last payment on the indebtedness was made in 1929. At the end of 1935, 1936, and 1937 petitioner's liabilities exceeded its assets in substantial amounts and its operations for 1923 to 1937, inclusive, except 1928, 1929, and 1930, resulted in net losses. Petitioner accrued on its books as Interest payable $46,954.17 and $49,301.90 in 1936 and 1937, respectively, and…
1Opinion of the Court
*1043OPINION.
Arnold :
The respondent disallowed the deduction of accrued interest taken by petitioner in 1936 and 1937. His reason for so doing, *1044as stated in the statement attached to the deficiency notice, was that there was no reasonable expectancy in 1986 and 1937 that the accrued interest would be paid by petitioner.
The petitioner contends on brief that the absence of reasonable expectancy of payment is an affirmative defense, and, not having been pleaded by respondent, he can not avail himself of such defense.
In the petition it is alleged that the respondent erroneously failed to allow proper…
2Cases cited4 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Brown v. HelveringSupreme Court of the United States · 1934
- Burnet v. HoustonSupreme Court of the United States · 1931
- United States v. American Can Co.Supreme Court of the United States · 1930
3Cited by12 opinions
- Zimmerman Steel Co. v. Commissioner of Int. Rev.Court of Appeals for the Eighth Circuit · 1942
- Gounares Bros. & Co., Inc. v. United StatesCourt of Appeals for the Fifth Circuit · 1961
- Southeastern Mail Transport, Inc. v. CommissionerUnited States Tax Court · 1992
- Sheraton Plaza Co. v. CommissionerUnited States Tax Court · 1963
- Chicago & W. I. R. Co. v. CommissionerUnited States Tax Court · 1961
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