Court Opinion

ID: 4491917
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:03:07.848415+00
Date Added: 2024-06-11T15:03:57.065814
License: Public Domain

Seawell,
dissenting: Reduced to its final analysis, this is what occurred in reality in petitioner’s bond transaction:
It offered for sale its 20-year 5 per cent bonds in the amount of $2,000,000, to the purchaser who would take them at the greatest *177amount oí reduction of interest charge. The bonds were sold to a purchaser who agreed to reduce the interest for the 20 years by a present payment of $125,400, so that each year’s interest of $100,000 was reduced by the sum of $6,270 paid by the purchaser in advance.
The petitioner sold no capital asset, and it received no gain from capital or labor, or from both combined. Eisner v. Macomber, 252 U. S. 189. It received a rebate or reduction of the price to be paid for the hire of money, but this, I am persuaded, is no more taxable under the Sixteenth Amendment and Acts of Congress than the reduction of any other expense of business or the “ diminution of a loss.” Bowers v. Kerbaugh-Empire Co., 271 U. S. 170.