Investors Diversified Services, Inc. v. Commissioner
United States Tax Court
Petitioner originated mortgages at par without charging a fee to affiliated builders and sold these mortgages at a discount price to wholly owned subsidiaries over whom it had complete control and whose affairs it managed. Held, the differences between the par-originated amount of the mortgages and the discounted sales price are not deductible losses. Held, further, that losses on sales of mortgages to nonaffiliates are capital and not ordinary losses.
1Opinion of the Court
Scott, Judge:
Respondent determined deficiencies in petitioner’s income tax for the calendar years 1954 and 1955 in the amounts of $364,706.59 and $314,565.30, respectively. Petitioner claims an overpayment of tax in the amount of $28,521.78 for the year 1955.
The issues for decision are:(1) Whether Investors Diversified Services, Inc., sustained losses aggregating $1,307,886.60 on sales of mortgage loans to two wholly owned subsidiaries during the years 1954 and 1955.(2) Whether such losses, if sustained, are deductible for Federal income tax purposes.(3) Whether losses aggregating $102,467.66…
2Cases cited13 opinions
- Interstate Transit Lines v. CommissionerSupreme Court of the United States · 1943
- Commissioner of Internal Revenue v. The Bagley & Sewall Co.Court of Appeals for the Second Circuit · 1955
- Bagley & Sewall Co. v. CommissionerUnited States Tax Court · 1953
- Crown Cork International Corp. v. CommissionerUnited States Tax Court · 1944
- Majestic Securities Corp. v. Commissioner of Int. Rev.Court of Appeals for the Eighth Circuit · 1941
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3Cited by19 opinions
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- Burbank Liquidating Corp. v. CommissionerUnited States Tax Court · 1963
- Lomas Santa Fe, Inc. v. CommissionerUnited States Tax Court · 1980
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