Eastern Steamship Lines, Inc. v. Commissioner

*791OPINION.

Sternhagen:

1. The first issue arises from the respondent’s determination that petitioner’s income should include the difference between the face value of its outstanding mortgage bonds ($5,524,900) and the lower price ($4,157,175) for which it bought them. The bonds were issued within the taxable year as part of the reorganization plan by which it acquired the properties of the predecessor corporation. Before the close of the year it discharged this capital obligation by paying less. Under circumstances less favorable to the taxpayer, the Board has in several cases decided that there…