West Missouri Power Co. v. Commissioner
United States Tax Court
In 1941, the State of Arkansas redeemed some of its refunding bonds which were received by petitioner in 1934 in substitution for some defaulted bonds which petitioner had acquired in prior years. Held, that a refunding of outstanding defaulted bonds of the State of Arkansas pursuant to a refunding state statute with provisions for the same face value of bonds and the same interest rate did not create a new debt but resulted in a continuation of the existing indebtedness.
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In 1941, the State of Arkansas redeemed some of its refunding bonds which were received by petitioner in 1934 in substitution for some defaulted bonds which petitioner had acquired in prior years. Held, that a refunding of outstanding defaulted bonds of the State of Arkansas pursuant to a refunding state statute with provisions for the same face value of bonds and the same interest rate did not create a new debt but resulted in a continuation of the existing indebtedness. Motor Products Corporation, 47 B. T. A. 983, affirmed per curiam 142 F. 2d 449. Held, further, that petitioner's surrender…
1Opinion of the Court
OPINION.
Black, Judge:
This proceeding raises the question whether petitioner sustained a loss in 1941 upon the redemption of its Arkansas “refunding bonds” as it claims, or realized a capital gain thereon as determined by the Commissioner. This question calls for a determination of petitioner’s basis for the “refunding bonds.” Petitioner maintains in two independent arguments that the basis is the cost to petitioner of the “old bonds,” while respondent determined it to be the fair market value of the “refunding bonds” on the date of exchange. of the “old bonds” for the “refunding bonds.”…
2Cases cited4 opinions
- Emery v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1948
- City Bank Farmers Trust Co. v. HoeyDistrict Court, S.D. New York · 1942
- Emery v. CommissionerUnited States Tax Court · 1947
- Girard Trust Co. v. United StatesCourt of Appeals for the Third Circuit · 1948
3Cited by4 opinions
- San Antonio Savings Association and Subsidiaries v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1989
- Olmstead, Inc. Life Agency v. CommissionerUnited States Tax Court · 1960
- Olmstead, Inc. Life Agency v. CommissionerUnited States Tax Court · 1960
- West Missouri Power Co. v. CommissionerUnited States Tax Court · 1952