Head Ski Company, Inc. v. United States
HEAD SKI COMPANY, Inc., Appellee, v. UNITED STATES of America, Appellant
Opinion
PER CURIAM:
The government appeals from the entry of summary judgment in favor of Head Ski Company granting a refund of income tax for 1965.
1
The sole issue is whether a premium Head Ski paid for the redemption of a convertible note was deductible as a business expense or nondeductible as a capital outlay. Applying Treasury Regulation § 1.61-12(e) (1) (1965), 2
the district court held that the premium was deductible. In reaching this conclusion, it relied primarily on Southwest Grease & Oil Company, Inc. v. United States, 435 F.2d 675 (10th Cir. 1971), and Roberts & Porter, Inc. v. Commissioner of Internal Revenue, 307 F.2d 745 (7th Cir. 1962), which in their material aspects are indistinguishable. We affirm.
1
. Head Ski Co. v. United States, 323 F. S,upp. 1383 (D.Md.1971).
2
. Tlie transaction occurred before the effective date of 26 U.S.C. § 249 (1969), which contains a limitation on the deduction of a premium paid to repurchase convertible obligations.
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