¶1dissenting: Section 23 (a) (2) allows a deduction for the ordinary and necessary expenses paid during the taxable year for the management, conservation, or maintenance of property held for the production of income. The petitioner had property in the form of money owed to it by Snedeker on which money Snedeker was required to pay interest. That was property held for the production of income. A policy of insurance on the debtor’s life was assigned to the petitioner as collateral security for the debt. The petitioner paid the premiums on those policies during the taxable year. Such payments were ordinary and necessary expenses paid during the taxable year for the management, conservation, or maintenance of property held for the production of income. The situation is not different in principle from fire insurance premiums paid on a policy covering a house owned by the estate on which it is entitled to receive rent from a tenant. Such premiums have always been regarded as ordinary and necessary expenses paid for the management, conservation, or maintenance of such property.
17 T.C. 20
Hall v. Commissioner
Decided July 17, 1951
United States Tax Court · decided 1951-07-17
Deduction -- Nonbusiness Expense -- Premiums Paid on Insurance. -- The petitioner held insurance on the life of a debtor of petitioner's estate to secure payment of the debt principal. Held: that (1) the estate was not engaged in a business, and the insurance premium expense is not deductible under section 23 (a) (1) (A); and that (2) the payment of insurance premiums is not a nonbusiness expense under section 23 (a) (2) and is not deductible.
Cited by 3 later decisions — most recently August 1969
2 federal appellate ·
Good law ✅— No negative treatment on recordhow we know
Decision will be entered for the respondent · Decided 1951-07-17
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