Logourl black
From our private database of 14,200+ case briefs...

Davison v. Commissioner

United States Tax Court
107 T.C. 35 (1996)


Facts

Charles Davison (plaintiff) was the head partner of White Tail, an accounting firm. In December 1980, White Tail notified John Hancock Life Insurance Company (Hancock) that White Tail could not pay a January 1981 installment that was due on the repayment of a loan from Hancock. The installment included charges for the repayment of the loan’s principal and for interest on the loan. In response, Hancock agreed to loan White Tail the exact amount that White Tail needed to pay the January interest charge, and to add this second loan’s amount to the first loan’s principal. White Tail agreed to use the proceeds from the second loan to pay the January installment. On December 30, 1980, Hancock wired the second loan’s proceeds to White Tail, and White Tail deposited the proceeds into its checking account. On December 31, 1980, White Tail wired the full amount of the January 1981 installment from its account to Hancock. On White Tail’s 1980 federal tax return, Davison claimed the interest portion of the December 31 payment as an interest deduction. The commissioner of internal revenue (commissioner) (defendant) ruled that the December 31 payment was not tax deductible, and disallowed the deduction. Davison filed a petition challenging the commissioner’s ruling.

Rule of Law

Issue

Holding and Reasoning (Ruwe, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.

Here's why 252,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 14,200 briefs, keyed to 189 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.