Estate Planning Corp. v. Commissioner of Internal Rev.

MANTON, Circuit Judge.

The Commissioner determined a deficiency of $2,356.13 in petitioner’s income tax for the year 1932 and $3,998.61 in its income tax and excess profits tax for the year 1933. This was due to a disallowance of a deduction from gross income of $24,-000 paid by petitioner during each of these years as interest on the $600,000 issue of its 4% debenture bonds.

Section 23(b) of the Revenue Act of 1932, 47 Stat. 179, 26 U.S.C.A. § 23, provides for deductions from gross income of all interest paid or accrued within the taxable year on indebtedness.

Petitioner, a New York…