Pittsburgh & West Virginia Railway Co. v. Commissioner

OPINION.

Opper, Judge:

Both parties accept the principle of United States v. Kirby Lwnber Co., 284 U. S. 1, as applicable to the present transaction. They differ as to the year in which gain to petitioner would be realized thereunder. The facts are unusual.

Petitioner had outstanding a first mortgage bond issue. It borrowed additional funds on its five-year notes, and in that connection obligated itself to devote part of its earnings to the reduction of the mortgage bonds. -When acquired, however, the bonds were not to be retired, but had to “remain alive” and be delivered to the trustee under…