United States Supreme Court Cases & Opinions

U.S. Supreme Court

Gulf, Mobile & Northern R. Co. v. Helvering, 293 U.S. 295 (1934)

Gulf, Mobile & Northern R. Co. v. Helvering

No. 413

Argued November 13, 1934

Decided December 3, 1934

293 U.S. 295

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA

Syllabus

Amortized discount on bonds of one corporation held by another cannot be deducted from gross income in their consolidated tax return. Old Mission Portland Cement Co. v. Helvering, ante, p. 293 U. S. 289.

63 App.D.C. 244, 71 F.2d 953, affirmed.

Certiorari to review the affirmance of an order of the Board of Tax Appeals, 22 B.T.A. 233, sustaining a deficiency assessment.

MR. JUSTICE STONE delivered the opinion of the Court.

Certiorari was granted in this case "limited to the question of the right of the taxpayer to deductions on account of amortization of bond discount." At various dates between 1913 and 1916, Meridian & Memphis Railway Company sold its thirty-year 5% gold bonds at a discount. During the years 1924 to 1926, inclusive, while petitioner was the owner and holder of the entire bond issue, it joined with the Meridian & Memphis in filing consolidated income tax returns as affiliated corporations. In each year, the latter deducted from gross income the amortized bond discount. The deductions were disallowed by the Commissioner. His action was sustained by the Board of Tax

Page 293 U. S. 296

Appeals, 22 B.T.A. 233, and by the Court of Appeals for the District of Columbia. 71 F.2d 953. The question presented is the same as that decided this day in Old Mission Portland Cement Co. v. Helvering, ante, p. 293 U. S. 289. The judgment of the court below was therefore right, and is

Affirmed.

MR. JUSTICE BUTLER and MR. JUSTICE ROBERTS think the judgment should be reversed.