John Hancock Life Ins. Co. (U.S.A.) v. Comm'r
United States Tax Court
JH is primarily in the business of selling life insurance policies, annuities, long-term care insurance, and other retirement services. To fulfill its contractual obligations under these services JH invests the premiums it receives. In 1979 JH began investing in leveraged leases.
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JH is primarily in the business of selling life insurance policies, annuities, long-term care insurance, and other retirement services. To fulfill its contractual obligations under these services JH invests the premiums it receives. In 1979 JH began investing in leveraged leases. A leveraged lease is a lease in which the equity investor borrows money from a third-party lender to finance a portion of the purchase price of the asset involved and leases the asset to its ultimate user. In 1997 JH began investing in lease-in-lease-out (LILO) transactions and in 1999 began investing in…
1Opinion of the Court
Haines, Judge:
These cases are consolidated for purposes of trial, briefing, and opinion. Respondent determined the following deficiencies in petitioners’ Federal income tax for 19942 and 1997-2001 (years at issue):3
Year Deficiency
1994 . $8,860,564
1997 . 65,746,621
1998 . 173,497,367
1999 . 59,899,141
2000 . 108,046,947
2001 . 143,516,079
These deficiencies stem from 27 leveraged lease transactions (leveraged leases) that petitioners participated in between 1997 and 2001. For purposes of resolving this action expeditiously, the parties agreed to try seven of the leveraged leases (test transactions)…
2Cases cited60 opinions
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- Knetsch v. United StatesSupreme Court of the United States · 1960
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