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Taxation - Income Tax - Whether Purchase And Retirement By Corporation Of Own Bonds At Less Than Amount Of Issue Constitutes A Taxable Gain Where Corporation Is Insolvent, S. R. Stroud
Michigan Law Review
Petitioner, a railway corporation, in 1906 leased all its property to an operating company for a term of fifty years. At the same time petitioner issued $434,000 in first mortgage bonds which were used to refund a prior issue of $350,000 and to provide for certain improvements on the road. Interest on the bonds was to be met by lessee's payment of the greater part of the rental directly to the trustee of the mortgage bonds, but no provision for a sinking fund was made. In October, 1932, petitioner purchased $19,000 par value of aforesaid mortgage bonds for $4,750, and …
Taxation - Income Tax - Improvements Made By Lessee As Income To Lessor, Ralph E. Helper
Taxation - Income Tax - Improvements Made By Lessee As Income To Lessor, Ralph E. Helper
Michigan Law Review
The recent decision of the Supreme Court of the United States in M. E. Blatt Co. v. United States has fairly settled the conflict that has ranged for over twenty years between the Commissioner of Internal Revenue and the Board of Tax Appeals on one side, and the courts on the other. The commissioner's contention that improvements made by a lessee should be taxed as income to the lessor was denied, and by dictum the Court approved the reasoning of Judge Learned Hand in Hewitt Realty Co. v. Commissioner, wherein he said that the judicial concept of "income" did …