Gulf, Mobile & Northern Railroad v. Helvering

Mr. Justice

Stone delivered the opinion of the Court.

Certiorari was granted in this case “ limited to the question of the right of the taxpayer to deductions on account of amortization of bond discount.” At various dates between 1913 and 1916, Meridian & Memphis Railway Company sold its thirty-year 5% gold bonds at a discount. During the years 1924 to 1926, inclusive, while petitioner was the owner and holder of the entire bond issue, it joined with the Meridian & Memphis in filing consolidated income tax returns as affiliated corporations. In each year the latter deducted from gross income…