Fed. Home Loan Mortg. Corp. v. Comm'r
United States Tax Court
P was originally exempt from Federal income taxation. However, on Jan. 1, 1985, P became subject to taxation under the Deficit Reduction Act of 1984 (DEFRA), Pub. L. 98-369, sec. 177, 98 Stat. 709. P adopted the accrual method of accounting for its first taxable year commencing Jan. 1, 1985. Before that date, P acquired certain mortgages that were in default.
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P was originally exempt from Federal income taxation. However, on Jan. 1, 1985, P became subject to taxation under the Deficit Reduction Act of 1984 (DEFRA), Pub. L. 98-369, sec. 177, 98 Stat. 709. P adopted the accrual method of accounting for its first taxable year commencing Jan. 1, 1985. Before that date, P acquired certain mortgages that were in default. Interest accrued on each of those mortgages from the date of acquisition up to Jan. 1, 1985. At various points after Jan. 1, 1985, P foreclosed the mortgages on the underlying real estate. In computing its gain or loss from the…
1Opinion of the Court
OPINION
Ruwe, Judge:
Respondent determined deficiencies in petitioner’s Federal income taxes in docket No. 3941-99 for 1985 and 1986, as follows:
Year Deficiency
$36,623,695 1 — * CO 00 CR
40,111,127 h-i CO OO Oi
Petitioner claims overpayments of $9,604,085 for 1985 and $12,418,469 for 1986.
Respondent determined deficiencies in petitioner’s Federal income taxes in docket No. 15626-99 for 1987, 1988, 1989, and 1990, as follows:
Year Deficiency
1987 . $26,200,358
1988 . 13,827,654
1989 . 6,225,404
1990 . 23,466,338
Petitioner claims overpayments of $57,775,538 for 1987, $28,434,990 for 1988, $32,577,346…
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