Butler Consol. Coal Co. v. Commissioner
United States Tax Court
1. In 1941 the petitioner sold property underlaid with coal upon which it had discontinued mining operations in 1930. Held, that the loss resulting from the sale was a long term capital loss. 2. During the years 1939 and 1940 the petitioner had outstanding a large amount of interest-bearing bonds and notes upon which no interest was paid during those years. The petitioner kept its books of account upon the accrual basis.
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1. In 1941 the petitioner sold property underlaid with coal upon which it had discontinued mining operations in 1930. Held, that the loss resulting from the sale was a long term capital loss. 2. During the years 1939 and 1940 the petitioner had outstanding a large amount of interest-bearing bonds and notes upon which no interest was paid during those years. The petitioner kept its books of account upon the accrual basis. Upon a recapitalization of the corporation in 1941 new bonds and notes were substituted for the old bonds and notes and the accrued interest thereon was canceled. Held, that…
1Opinion of the Court
OPINION.
Smith, Judge:
The first question for consideration is whether the petitioner is entitled to deduct from its gross income of 1941 the full amount of the loss sustained by it from the sale of its Erico property. In its income tax return for 1941 the petitioner claimed the deduction of a loss of $110,694.94. The respondent has disallowed the deduction of $96,731.70 of this amount. The principal part of the loss is based upon the cost of the coal in place in the Erico property. The parties have stipulated that the investment of the petitioner in the coal in place on the property was…
2Cases cited5 opinions
- Consolidated Rock Products Co. v. Du BoisSupreme Court of the United States · 1941
- Sexton v. DreyfusSupreme Court of the United States · 1911
- American Iron & Steel Manufacturing Co. v. Seaboard Air Line RailwaySupreme Court of the United States · 1914
- Ticonic National Bank v. SpragueSupreme Court of the United States · 1938
- Rohrer v. DeatherageIllinois Supreme Court · 1929
3Cited by18 opinions
- Watson v. CommissionerSupreme Court of the United States · 1953
- Battjes v. United StatesCourt of Appeals for the Sixth Circuit · 1949
- Watson v. CommissionerUnited States Tax Court · 1950
- Cohen v. CommissionerUnited States Tax Court · 1954
- Owen v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1951
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