Hanover Bank v. Commissioner

Despite the seemingly complex factual composition of the two cases consolidated herein, 1 this opinion deals with a relatively simple question of taxation: The extent to which a taxpayer may deduct, through amortization under the Internal Revenue Code of 1939, the premium he has paid in purchasing corporate bonds. In 1953, prior to December 1, the petitioners purchased fully taxable utility bonds at a premium above maturity value. 2 The bonds were callable at the option of the issuer at either a general or special call price, and at either price they were callable upon 30 days’ notice. The…