Benjamin Franklin Life Assurance Co. v. Commissioner
United States Board of Tax Appeals
Petitioner was organized as a mutual life insurance company under the laws of California. It obtained the funds necessary for deposit with the insurance commissioner of that state from another corporation which had contracted to act as "General Manager" for petitioner.
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Petitioner was organized as a mutual life insurance company under the laws of California. It obtained the funds necessary for deposit with the insurance commissioner of that state from another corporation which had contracted to act as "General Manager" for petitioner. In return it gave to the general manager a "Certificate of indebtedness" which, after acknowledging receipt of a "contribution" and fixing the rate of interest at 5 percent, provided that principal and interest should be payable only out of the surplus remaining after providing for all reserves and other liabilities. The…
1Opinion of the Court
*618OPINION.
Kern :
The only question involved is whether the sums paid by petitioner and claimed as interest can be called “interest paid”, and deductions therefor allowed under section 203 (a) (8) of the Revenue Act of 1934. We think that they should be allowed.
The California law provided for the advancement of moneys to a corporation doing the business of insurance on the assessment plan and required that the return of the principal and any interest agreed to on the loan “shall be payable only out of the surplus remaining after providing for all required reserves and other liabilities whether…
2Cited by5 opinions
- Commissioner of Internal Revenue v. Union Mutual Insurance Company of ProvidenceCourt of Appeals for the First Circuit · 1967
- Union Mut. Ins. Co. v. CommissionerUnited States Tax Court · 1966
- Benjamin Franklin Life Assurance Co. v. CommissionerUnited States Board of Tax Appeals · 1942
- Union Mut. Ins. Co. v. CommissionerUnited States Tax Court · 1966
- Union Mut. Ins. Co. v. CommissionerUnited States Tax Court · 1966