Franklin v. Commissioner
United States Tax Court
On Mar. 9, 1972, petitioner-husband borrowed $ 2,250,000 from bank A. Bank A sold participations in the loan to other banks. On Mar. 9, 1973, (1) the $ 2,250,000 loan was renewed; (2) petitioner-husband borrowed $ 120,124.99 from bank A, which deposited the proceeds into his otherwise minimally used account at bank A; (3) petitioner-husband wrote a check for interest of $ 120,124.99 payable to bank A, which, in turn, distributed some of the interest to the other banks.
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On Mar. 9, 1972, petitioner-husband borrowed $ 2,250,000 from bank A. Bank A sold participations in the loan to other banks. On Mar. 9, 1973, (1) the $ 2,250,000 loan was renewed; (2) petitioner-husband borrowed $ 120,124.99 from bank A, which deposited the proceeds into his otherwise minimally used account at bank A; (3) petitioner-husband wrote a check for interest of $ 120,124.99 payable to bank A, which, in turn, distributed some of the interest to the other banks. Bank A sold participations in the $ 2,250,000 renewal loan (but not the $ 120,124.99 loan) to other banks. On Mar. 9, 1974,…
1Opinion of the Court
Chabot, Judge:
Respondent determined deficiencies in Federal individual income tax against petitioners for 1973 and 1974 in the amounts of $61,293.85 and $111,465.77, respectively. In connection with issue (2) infra, petitioners claim overpayments for both years. The issues for decision are as follows:(1) Whether petitioners are entitled to deduct $120,124.99 and $206,414.491 as interest paid for 1973 and 1974, respectively, under section 163,2 as a consequence of petitioner-husband’s transactions with a bank; and(2) Whether, if petitioner-husband’s transactions do not result in his being…
2Cases cited24 opinions
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- G. Douglas Burck and Marjorie W. Burck v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1976
- Burck v. CommissionerUnited States Tax Court · 1975
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