District Bond Co. v. Commissioner

Petitioning taxpayer seeks a review of a decision of the Board of Tax Appeals (a) holding not tax exempt the obligations of certain municipal subdivisions of the State of California on street improvement and like bonds issued by them, and (b) denying a deduction of interest coupon debts to taxpayer on certain of the bonds which became worthless in a tax year later than that in which the mature coupons were accrued on taxpayer’s books but not charged into its taxable income.

(a) Taxpayer’s bond interest taxed by the Commissioner was accrued on taxpayer’s books in the tax years 1934 and 1935. The interest was on bonds issued under the California Improvement Act of 1911, St.Cal.1911, p. 730, the California Street Opening, Bond Act of 1911, St.Cal. 1911, p. 1192,' and the California County Improvement Act of 1921, St.Cal.1921, p. 1658. It is stipulated that: “All of the bonds issued under the various California Improvement Acts above referred to, the interest on which is here in controversy, were issued by various California Municipalities in accordance with the provisions of the Improvement Statute applicable to each type of. bond. * . * * All of the California Improvement Bonds…

concurs in the reversal and dissents from the affirmance.