Security Bank S.S.B. v. Commissioner
United States Tax Court
P, a savings and loan association, acquired by repossession properties securing mortgage loans made by P to the owner-debtors of the properties. At the time P obtained possession of the properties, there was due substantial unpaid interest. P subsequently sold the properties at a gain, and recovered some of the previously unpaid interest.
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P, a savings and loan association, acquired by repossession properties securing mortgage loans made by P to the owner-debtors of the properties. At the time P obtained possession of the properties, there was due substantial unpaid interest. P subsequently sold the properties at a gain, and recovered some of the previously unpaid interest. Held: amounts representing the recovery of unpaid interest on the sale of the foreclosure properties are currently taxable as ordinary income, and are not treated as credits to a bad debt reserve.
1Opinion of the Court
OPINION
NlMS, Judge:
Respondent determined the following deficiencies in petitioners’ Federal income tax:
FYE Deficiency
June 30, 1985 .'. $75,644
June 30, 1986 :. 112,277
June 30, 1987 . 103,992
June 30, 1988 . 121,356
Unless otherwise indicated, all section references are to sections of the Internal Revenue Code in effect for the years in issue. All Rule references are to the Tax Court Rules of Practice and Procedure.
After concessions, the sole issue remaining for decision is whether petitioner is required to report currently as ordinary income its realized gains from the sale of real property that…
2Cases cited7 opinions
- Helvering v. Midland Mutual Life InsuranceSupreme Court of the United States · 1937
- First Charter Financial Corp., Plaintiff-Appellee-Cross-Appellant v. United States of America, Defendant-Appellant-Cross-AppelleeCourt of Appeals for the First Circuit · 1982
- Helvering v. Missouri State Life Ins. Co.Court of Appeals for the Eighth Circuit · 1934
- Allstate Sav. & Loan Asso. v. CommissionerUnited States Tax Court · 1977
- Gibraltar Financial Corporation of California, Etc. v. The United StatesCourt of Appeals for the Federal Circuit · 1987
2 more not listed; retrieve them via the Exa API.
3Cited by2 opinions
- Security Bank S.S.B. & Subsidiaries, Formerly Known as Security Savings and Loan Association v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1997
- Security Bank S.S.B. v. CommissionerUnited States Tax Court · 1995