Rushing v. Commissioner
United States Tax Court
Petitioners, shareholders in Nova Corp., guaranteed notes of Nova to Citizens National Bank, Mercantile National Bank, and Tex-Tool Manufacturing Corp. Nova was adjudged a bankrupt in 1967 and was insolvent as of Dec. 31, 1967. During 1967 petitioners paid the following: (1) Principal and interest as guarantors on Nova's note to Citizens; (2) principal and interest as guarantors on Nova's note to Mercantile; (3) legal expenses associated with the note to Tex-Tool; and (4)…
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Petitioners, shareholders in Nova Corp., guaranteed notes of Nova to Citizens National Bank, Mercantile National Bank, and Tex-Tool Manufacturing Corp. Nova was adjudged a bankrupt in 1967 and was insolvent as of Dec. 31, 1967. During 1967 petitioners paid the following: (1) Principal and interest as guarantors on Nova's note to Citizens; (2) principal and interest as guarantors on Nova's note to Mercantile; (3) legal expenses associated with the note to Tex-Tool; and (4) legal and accounting expenses associated with the sale of Nova's assets as the corporation was closed out. Held,…
1Opinion of the Court
Fat, Judge:
Respondent determined deficiencies in the income taxes of the petitioners, as follows:
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Numerous concessions having been made by the parties, the only issues left for decision involve the petitioners at docket Nos. 2550-70, 2552-70, 3659-70,and 3660-70.
The first question is whether the petitioners are entitled to interest expense deductions under section 163 2 for amounts paid in connection with their guarantee of a corporate debt. The second issue presented is whether petitioners are entitled to deduct under section 162, 165, or 212 the legal and accounting expenses…
2Cases cited20 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- United States v. GilmoreSupreme Court of the United States · 1963
- Woodward v. CommissionerSupreme Court of the United States · 1970
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Dalton v. BowersSupreme Court of the United States · 1932
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3Cited by52 opinions
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- Imel v. CommissionerUnited States Tax Court · 1973
- Smith v. CommissionerUnited States Tax Court · 1985
- Lloyd W. Golder, Jr. And Esther Golder v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1979
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