Crown v. Commissioner
United States Tax Court
Petitioner was called upon in 1965 to satisfy his guaranty of certain indebtedness to bank 1. Petitioner responded by delivering his personal note (appropriately collateralized) which was renewed at various times through 1966. On Dec. 30, 1966, petitioner satisfied his obligation ($ 2,697,131.31) to bank 1, with funds borrowed from bank 2 with which petitioner had a line of credit, the unused portion of which exceeded $ 39 million.
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Petitioner was called upon in 1965 to satisfy his guaranty of certain indebtedness to bank 1. Petitioner responded by delivering his personal note (appropriately collateralized) which was renewed at various times through 1966. On Dec. 30, 1966, petitioner satisfied his obligation ($ 2,697,131.31) to bank 1, with funds borrowed from bank 2 with which petitioner had a line of credit, the unused portion of which exceeded $ 39 million. The collateral securing the note at bank 1 was released into petitioner's control. On Mar. 1, 1967, petitioner borrowed sufficient funds from bank 1 to pay off the…
1Opinion of the Court
Wilbur, Judge'.
Respondent issued a statutory notice of deficiency on December 16, 1976, in which he determined deficiencies in petitioners’ Federal income tax for their taxable years 1966 through 1969, as follows:
Year Deficiency
1966. $696,272.30
1967. 255.74
1968. 35,563.96
1969. 2,022.87
The only issues remaining for our decision relate to the proper tax treatment of various transactions arising from petitioner Henry Crown’s guarantee of an obligation of United Equity Corp. Specifically, petitioners allege that:(1) Respondent erroneously failed to allow a nonbusiness bad debt deduction in the…
2Cases cited28 opinions
- Crane v. CommissionerSupreme Court of the United States · 1947
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Eckert v. BurnetSupreme Court of the United States · 1931
- Helvering v. PriceSupreme Court of the United States · 1940
- American Bantam Car Co. v. CommissionerUnited States Tax Court · 1948
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