Indian Trail Trading Post, Inc. v. Commissioner
United States Tax Court
Petitioner borrowed funds in excess of its current business needs. Eight months later, when it still had cash in excess of such needs, it purchased tax-exempt bonds. Held, a portion of the interest paid by petitioner on such borrowed funds is nondeductible under sec. 265(2), I.R.C. 1954.
1Opinion of the Court
Tannenwald, Judge: *
Respondent determined a deficiency of $3,-298.84 in petitioner’s income tax for the taxable year ended October 31, 1967.
The only issue remaining for our consideration is whether petitioner incurred or continued to carry indebtedness in order to purchase or carry tax-exempt, interest-bearing Kentucky State toll road bonds.
FINDINGS OF FACT
Some of the facts are stipulated and are so found.
Petitioner’s principal place of business was located in Louisville, Ky., at the time its petition herein was filed. It timely filed its corporate income tax return for its fiscal year ended…
2Cases cited12 opinions
- Denman v. SlaytonSupreme Court of the United States · 1931
- The Wisconsin Cheeseman, Inc. v. United StatesCourt of Appeals for the Seventh Circuit · 1968
- John E. Leslie and Evelyn G. Leslie v. Commissioner of the Internal RevenueCourt of Appeals for the Second Circuit · 1969
- Illinois Terminal Railroad Company v. The United StatesUnited States Court of Claims · 1967
- Constance M. Bishop v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1965
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3Cited by23 opinions
- H Enters. Int'l v. CommissionerUnited States Tax Court · 1995
- Indian Trail Trading Post, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1974
- Israelson v. United StatesDistrict Court, D. Maryland · 1973
- Shell Oil Co. v. CommissionerUnited States Tax Court · 1987
- Handy Button Machine Co. v. CommissionerUnited States Tax Court · 1974
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