P. G. Lake, Inc. v. Commissioner
United States Tax Court
Petitioner, a corporation on the calendar year accrual basis, accrued interest on an obligation owing to its president and controlling stockholder, which interest was payable January 1. The interest was not actually paid within the taxable year or within two and one-half months after the close thereof. The president filed his return on the calendar year cash receipts and disbursements basis.
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Petitioner, a corporation on the calendar year accrual basis, accrued interest on an obligation owing to its president and controlling stockholder, which interest was payable January 1. The interest was not actually paid within the taxable year or within two and one-half months after the close thereof. The president filed his return on the calendar year cash receipts and disbursements basis. Held, the deduction of the amount of interest accrued but unpaid is precluded by the provisions of section 24 (c) of the Internal Revenue Code.
1Opinion of the Court
OPINION.
ARTjndell, Judge:
The sole question here involved is whether the deduction of accrued interest otherwise allowable by section 23 (b) of the Internal Revenue Code is barred by the provisions of section 24 (c).1 The latter section operates to prohibit the deduction of accrued interest where three specified circumstances coexist. Michael Flynn, Manufacturing Co., 3 T. C. 932. Under the method of accounting employed by Lake the amount of interest sought as a deduction in this proceeding by petitioner was not reported or reportable by Lake in his 1939 return. The petitioner and Lake are…
2Cases cited1 opinion
- Michael Flynn Mfg. Co. v. CommissionerUnited States Tax Court · 1944
3Cited by35 opinions
- Clínica Dr. Mario Juliá, Inc. v. Secretario de HaciendaSupreme Court of Puerto Rico · 1954
- Geiger & Peters, Inc. v. CommissionerUnited States Tax Court · 1957
- Ohio Battery & Ignition Co. v. CommissionerUnited States Tax Court · 1945
- Anthony P. Miller, Inc. v. CommissionerUnited States Tax Court · 1946
- Wooten v. CommissionerUnited States Tax Court · 1949
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