Opinion ID: 399155
Heading Depth: 3
Heading Rank: 1

Heading: The Parties' Stipulation

Text: 40 The parties stipulated: American has never received any payment on account of all or any portion of the Delinquent Interest due on any Defaulted Real Property Loan from the borrower or any other person whomsoever. The district court adopted this stipulation in its findings of fact. 41 The stipulation that American has not received any payment on account of interest is not a concession that American has recovered no interest. The district court did not so interpret the stipulation. It held only that all proceeds from sale of section 595 properties constitute recoveries of capital credited to the taypayer's bad debt reserve. The district court did not hold that the IRS conceded that American had recovered no interest. 42 While American may not have received any payment on account of accrued but unpaid interest, it may nonetheless have recovered such interest through a post-foreclosure sale, if it sold security or option property for more than the principal amount due on the loan plus disposition expenses. This more limited interpretation of the stipulation is consistent with two other stipulations. They provide, as to option properties, that if a savings and loan is required to recognize interest income on the disposition of real property, particular sums will constitute interest income to American. This also indicates that no one believed the stipulation resolved the interest income question.