Family Group, Inc. v. Commissioner
United States Tax Court
P acquired eight junior mortgages and underlying notes shortly after it was incorporated in November 1964. The junior mortgages required petitioner to discharge certain senior mortgages and liens out of collections.
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P acquired eight junior mortgages and underlying notes shortly after it was incorporated in November 1964. The junior mortgages required petitioner to discharge certain senior mortgages and liens out of collections. Held, the payments which petitioner made or caused to be made to the senior mortgagees and lienholders during 1967 were motivated primarily by petitioner's liability as holder of the junior mortgages rather than petitioner's fear of foreclosure, and such payments are hence nondeductible capital expenditures. Held, further, petitioner was subject to the personal holding company tax…
1Opinion of the Court
Forrester, Judge:
Respondent has determined a deficiency of $4,654.79 in petitioner’s income tax for the taxable year 1967. The issues presented for our decision are (1) whether petitioner as holder of second mortgages on certain properties is entitled to deduct amounts which were paid to discharge prior liens on the same properties, (2) whether petitioner is liable for the personal holding company tax, and (3) whether petitioner is entitled to deductions for purported interest payments.
FINDINGS OF FACT
Some of the facts were stipulated and are so found.
Petitioner is a corporation which had its…
2Cases cited25 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Crane v. CommissionerSupreme Court of the United States · 1947
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- Lohrke v. CommissionerUnited States Tax Court · 1967
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3Cited by7 opinions
- David R. Webb Company, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1983
- Thompson v. CommissionerUnited States Tax Court · 1980
- Jack's Maintenance Contractors, Inc. v. CommissionerUnited States Tax Court · 1981
- Bowen v. CommissionerUnited States Tax Court · 1974
- Family Group, Inc. v. CommissionerUnited States Tax Court · 1973
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