Desks, Inc. v. Commissioner
United States Tax Court
In order to induce Standard to furnish merchandise on credit, petitioner had to agree on July 1, 1936, to pay premiums and interest on a $ 60,000 life insurance policy assigned to Standard by Hale.
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In order to induce Standard to furnish merchandise on credit, petitioner had to agree on July 1, 1936, to pay premiums and interest on a $ 60,000 life insurance policy assigned to Standard by Hale. Hale, a bankrupt corporation run by many of the same officers and employees now with petitioner, had been indebted to Standard for $ 60,102.14. Subsequently, Hale paid about 20 per cent of its debts to its creditors, including Standard, and Standard contracted to remit to petitioner insurance proceeds in excess of $ 48,081.47, the unpaid indebtedness of Hale without interest. Accordingly, shortly…
1Opinion of the Court
OPINION.
Black, Judge:
There are two questions raised in this proceeding; (1) are the life insurance premiums allowable deductions under section 23 (a) of the Code, and (2) is $12,151.33 received from the insurance proceeds in the fiscal year ended June 30,1947, taxable income in its entirety.
Hale became indebted to Standard for $60,102.14 and assigned to Standard a $60,000 life insurance policy on Chauvin, Hale’s president. Hale went into bankruptcy, and some of its officers and employees formed petitioner corporation, which engaged in the same business. In order to induce Standard to furnish…
2Cases cited3 opinions
- Rieck v. HeinerCourt of Appeals for the Third Circuit · 1928
- Klein v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1936
- St. Louis Refrigerating & Cold Storage Co. v. United StatesCourt of Appeals for the Eighth Circuit · 1947
3Cited by2 opinions
- Brock v. CommissionerUnited States Tax Court · 1982
- Desks, Inc. v. CommissionerUnited States Tax Court · 1952