First Trust & Savings Bank v. Commissioner

Board of Tax Appeals

First Trust & Savings Bank v. Commissioner

11 B.T.A. 1034

CourtUnited States Board of Tax Appeals

DecidedMay 4, 1928

DocketDocket No. 11746

StatusPublished

Cited by1 cases

This text of 11 B.T.A. 1034 (First Trust & Savings Bank v. Commissioner) is published on Counsel Stack Legal Research, covering United States Board of Tax Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

First Trust & Savings Bank v. Commissioner, 11 B.T.A. 1034 (bta 1928).

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Opinion

[1035]*1035OPINION.

Trammell :

There is no dispute about the facts in this case. The question for decision is whether the petitioner received taxable income during the taxable years when it made loans from which it deducted the commission charges.

In ouiT opinion, the commissions were not actually received when the loan^ were made. The bank, upon the credit of the borrower’s note and the security given by him, paid out to him cash amounting to the face of the loan less the agreed commission and certain expenses. At that time the bank did not receive the commission exacted or agreed upon. It received nothing in fact except the promise to pay in the future.

While in this case the transaction involves commissions instead of interest or discounts, as was involved in the cases of Chatham & Phenix National Bank, 1 B. T. A. 460; The Bank of Hartsville, 1 B. T. A. 920; Madison & Kedzie State Bank, 1 B. T. A. 922; First National Bank of Stoughton, Wisconsin, 2 B. T. A. 586, we see no [1036]*1036distinction in the principle^ involved. Cf. J. W. Solof, 1 B. T. A. 776. Upon the authority of those cases we must hold that the petitioner did not receive taxable income in the years involved as a result of the commission transactions involved.

Judgment will be entered on 15 da/ys’ notice, under Rule 50.

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[1035]*1035OPINION.

Trammell :

There is no dispute about the facts in this case. The question for decision is whether the petitioner received taxable income during the taxable years when it made loans from which it deducted the commission charges.

In ouiT opinion, the commissions were not actually received when the loan^ were made. The bank, upon the credit of the borrower’s note and the security given by him, paid out to him cash amounting to the face of the loan less the agreed commission and certain expenses. At that time the bank did not receive the commission exacted or agreed upon. It received nothing in fact except the promise to pay in the future.

While in this case the transaction involves commissions instead of interest or discounts, as was involved in the cases of Chatham & Phenix National Bank, 1 B. T. A. 460; The Bank of Hartsville, 1 B. T. A. 920; Madison & Kedzie State Bank, 1 B. T. A. 922; First National Bank of Stoughton, Wisconsin, 2 B. T. A. 586, we see no [1036]*1036distinction in the principle^ involved. Cf. J. W. Solof, 1 B. T. A. 776. Upon the authority of those cases we must hold that the petitioner did not receive taxable income in the years involved as a result of the commission transactions involved.

Judgment will be entered on 15 da/ys’ notice, under Rule 50.

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11 B.T.A. 1034, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-trust-savings-bank-v-commissioner-bta-1928.

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