First Nat'l Bank v. Commissioner
United States Tax Court
Prior to the taxable year petitioner, a bank, had charged off, with tax benefit to a certain extent, certain corporate bonds held by it; and in the taxable year the bonds were redeemed and the petitioner recovered more than its basis, including the amount charged off with tax benefit. Held, that to the extent of the tax benefit the recovery was taxable as ordinary income and not capital gain and that the recovery above petitioner's basis in the bonds is capital gain.
1Opinion of the Court
OPINION.
Disney, Judge:
This case involves income tax for the calendar year 1944. Deficiency was determined in the amount of $4,347.45. The petitioner claims overpayment of $5,652.47. The only question presented is whether the sum of $58,117.73, received in the taxable year by the petitioner from retirement of bonds, after the bonds had been charged off, with tax benefit, in previous years, is taxable as ordinary income or capital gain. All facts were stipulated and are found by us as so stipulated. Only such as are regarded as necessary of statement in discussion of the issue will be set forth…
2Cases cited2 opinions
- Burnet v. Sanford & Brooks Co.Supreme Court of the United States · 1931
- Merchants Nat'l Bank v. CommissionerUnited States Tax Court · 1950
3Cited by7 opinions
- Kingsbury v. CommissionerUnited States Tax Court · 1976
- Davis v. CommissionerUnited States Tax Court · 1980
- Hearn Department Stores, Inc. v. CommissionerUnited States Tax Court · 1954
- Hearn Dep't Stores, Inc. v. CommissionerUnited States Tax Court · 1954
- Davis v. CommissionerUnited States Tax Court · 1980
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