Federal Home Loan Mortgage Corporation v. Commissioner

121 T.C. No. 15

UNITED STATES TAX COURT FEDERAL HOME LOAN MORTGAGE CORPORATION, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket Nos. 3941-99, 15626-99. Filed October 30, 2003. P was originally exempt from Federal income taxation. However, on Jan. 1, 1985, P became subject to taxation under the Deficit Reduction Act of 1984 (DEFRA),

Pub. L. 98-369, sec. 177, 98 Stat. 709. P adopted the accrual method of accounting for its first taxable year commencing Jan. 1, 1985. Before that date, P acquired certain mortgages that were in default. Interest accrued on each of those mortgages…