Bridges v. Commissioner
United States Tax Court
Taxpayer purportedly borrowed money from banks to buy Treasury notes and Government bonds which were pledged as collateral to secure the loans with the proceeds upon maturity or resale being applied to payment of the loans. Held: Amounts paid to bank and designated as prepaid interest not deductible under section 163(a), I.R.C. 1954. As payments of interest, the transactions were shams.
1Opinion of the Court
DreNNEN, Judge:
Respondent determined deficiencies in petitioners’ income tax for the taxable years 1956 and 1957 in the respective amounts of $12,983.87 and $31,628.18.
The only issue for decision is whether petitioners are entitled to deductions for interest in 1956 and 1957 in the respective amounts of $19,687.50 and $48,281.25.
BINDINGS OP PACT.
Some of the facts have been stipulated and are found accordingly. Petitioners, husband and wife, resided in Charlotte, N.C, during the years 1956 and 1957. They filed joint Federal income tax returns for the years 1956 and 1957 with the district…
2Cases cited27 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Knetsch v. United StatesSupreme Court of the United States · 1960
- Hanover Bank v. CommissionerSupreme Court of the United States · 1962
- Benjamin D. And Madeline Prentice Gilbert v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1957
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3Cited by64 opinions
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- Karme v. CommissionerUnited States Tax Court · 1980
- Sandor v. CommissionerUnited States Tax Court · 1974
- Joseph H. Bridges and Lillier J. Bridges v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1963
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