Home Savings and Loan Association v. United States

The Home Savings and Loan Association seeks a refund of income taxes which it paid as the transferee of the assets of Pasadena Savings and Loan Association and Savings and Loan Association of Anaheim pursuant to Notices of. Deficiency issued on December 10, 1962. The Notice relating to Pasadena was based upon a restoration to the taxable period, January 1, 1956 to March 12, 1956, of the sum of $5,281,452.87. This sum represents the total of that portion of Pasadena’s bad debt reserve previously deducted from taxable income during Pasadena’s taxable years 1952 through 1955 and the period of January 1, 1956 to March 12, 1956, and the additional sum of $436,121.63, consisting of income earned but not collected by Pasadena, a cash basis taxpayer, during the period January 1, 1956 to March 12, 1956. The Notice relating to Anaheim followed a similar pattern. That is, it was based upon a restoration to Anaheim’s income for its taxable period January 1, 1956 to July 11, 1956 of the sum of $1,087,563.39. This sum represents that portion of Anaheim’s bad debt reserve deducted during Anaheim’s 1952 through 1955 taxable years and the period of January 1, 1956 to July 11, 1956, and…