Bonded Mortg. Co. v. Commissioner
United States Board of Tax Appeals
1. COMMISSIONS - ACCRUAL BASIS. - The petitioner made real estate mortgage loans bearing interest at a specific rate. In addition to the interest, a commission was charged for making the loan and deducted from the face of each loan at the time the proceeds of the loan were paid over to the borrower. Petitioner kept its books on an accrual basis. Held, the total amount of commissions on loans so made in any particular year is taxable income for that year.
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1. COMMISSIONS - ACCRUAL BASIS. - The petitioner made real estate mortgage loans bearing interest at a specific rate. In addition to the interest, a commission was charged for making the loan and deducted from the face of each loan at the time the proceeds of the loan were paid over to the borrower. Petitioner kept its books on an accrual basis. Held, the total amount of commissions on loans so made in any particular year is taxable income for that year. (Columbia State Savings Bank,15 B.T.A. 219, followed.) 2. DEDUCTIONS. Expenses, including brokerage fees for selling a bond issue, should be…
1Opinion of the Court
*968OPINION.
Black :
The two issues in this proceeding are, (1) Whether or not the commissions on mortgage loans referred to in the findings of fact are to be treated as income in the year in which the mortgages are made or are to be prorated over the life of the mortgages and reported as income ratably for each year over which said loans *969extend, and (2) Whether or not expenses, including brokerage charges paid by the petitioner for the sale of its bonds, are to be treated as expense in the year in which paid and deducted in their entirety in that year, or are to be prorated over the life of the…
2Cases cited2 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- American National Co. v. United StatesSupreme Court of the United States · 1927
3Cited by1 opinion
- Bonded Mortg. Co. v. CommissionerUnited States Board of Tax Appeals · 1933