Farmers & Merchants Sav. Bank v. Commissioner

Memorandum Opinion

MURDOCK, Judge: The Commissioner determined a deficiency of $7,389.46 in excess profits tax for 1945. Three errors were assigned, two of which have been settled by a stipulation of the parties. The third is that the Commissioner failed to include 50 per cent of borrowed capital as a part of invested capital for the year. The facts have been stipulated.

The petitioner filed its return for 1945 with the collector of internal revenue for the district of Iowa.

The issue for decision is whether the petitioner may treat as borrowed capital within the meaning of section 719 (a) of the Internal Revenue Code, time certificates of deposit issued by it with maturity dates of either 6 or 12 months from the dates of issue and carrying interest at the rate of one per cent per annum. The respondent has conceded that this case is not distinguishable from Ames Trust and Savings Bank, 12 T.C. 770. This issue is decided for the petitioner upon authority of that case and of Economy Savings and Loan Company, 5 T.C. 543,*198 reviewed on other issues 158 Fed. (2d) 472.

Decision will be entered under Rule 50.