Legal Opinion

Charleston Nat'l Bank v. Commissioner

United States Tax Court

Decided April 30, 1953No. Docket No. 33231PublishedCited by 1 opinion

Read the full summary

1. For the taxable years 1944 and 1945, petitioner paid premiums on life insurance policies held as security for certain debts previously charged off to profit and loss in prior years. Held, deductible as ordinary and necessary business expenses. Dominion National Bank, 26 B. T. A. 421, followed. 2. In 1945 petitioner made recoveries of portions of bad debts charged off and allowed as deductions in prior years. Held, for failure to establish that such prior deductions resulted in no tax benefit, the recoveries constitute taxable income. 3. In computing petitioner's excess profits net income…

1Opinion of the Court

OPINION.

LeMire, Judge:

The first question presented is whether in the taxable years 1944 and 1945 petitioner is entitled to deduct premiums paid on certain policies of life insurance assigned to it as collateral security as ordinary and necessary business expenses under section 23 (a) (1) (A) of the Internal Revenue Code.

Petitioner contends that, since the insurance premiums were paid to protect its security in the hope of ultimately recovering as much of the indebtedness as possible, the expenditures are deductible as ordinary and necessary business expenses under the rationale of Dominion…

2Cases cited3 opinions

Gus Blass Co. v. CommissionerUnited States Tax Court · 1947
First Nat. Bank & Trust Co. of Tulsa v. JonesCourt of Appeals for the Tenth Circuit · 1944
First Nat. Bank & Trust Co. v. JonesDistrict Court, W.D. Oklahoma · 1943

3Cited by1 opinion

Charleston Nat'l Bank v. CommissionerUnited States Tax Court · 1953