Central Loan & Inv. Co. v. Commissioner
United States Board of Tax Appeals
During 1921, 1922, and 1923 taxpayer paid certain county taxes under protest and deducted the amounts paid in computing his taxable income for those years. The 1921 and 1922 deductions reduced the amount of his taxable income for those years. He derived no benefit from the deduction taken in 1923. In 1932 the statute under which the taxes were paid was held to be unconstitutional and the taxes previously paid were refunded.
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During 1921, 1922, and 1923 taxpayer paid certain county taxes under protest and deducted the amounts paid in computing his taxable income for those years. The 1921 and 1922 deductions reduced the amount of his taxable income for those years. He derived no benefit from the deduction taken in 1923. In 1932 the statute under which the taxes were paid was held to be unconstitutional and the taxes previously paid were refunded. Held, the amount of the refund is includable in taxpayer's income for 1932 only to the extent that he benefited from the deductions taken in the prior years.
1Opinion of the Court
OPINION.
Mellott :
The Commissioner determined a deficiency in petitioner’s income tax for the year 1932 in the amount of $4,346.05. The sole question is: “Must $121,499.56, received by petitioner as a refund of state taxes paid by its predecessor in prior years, be included in its gross income?”
We find the facts to be as stipulated. Briefly, they are as follows:
Petitioner, an Iowa corporation, was formed in 1929 for the purpose of liquidating the assets received by it in a nontaxable reorganization from its predecessor, the Central Trust Co. One of the assets consisted of a claim against Polk…
2Cases cited1 opinion
- Burnet v. Sanford & Brooks Co.Supreme Court of the United States · 1931
3Cited by27 opinions
- Alice Phelan Sullivan Corporation, a California Corporation v. The United StatesUnited States Court of Claims · 1967
- California and Hawaiian Sugar Refining Corporation, Limited v. The United StatesUnited States Court of Claims · 1962
- JA Dougherty's Sons v. Commissioner of Internal Rev.Court of Appeals for the Third Circuit · 1941
- Ridge Realization Corp. v. CommissionerUnited States Tax Court · 1966
- Philadelphia Nat. Bank v. RothensiesDistrict Court, E.D. Pennsylvania · 1942
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