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Edward J. and Elena Keith
docket No. 5857-93
Year Deficiency
1989 $14,709
1990 18,521
1991 14,840
These consolidated cases are test cases that involve the
Commissioner's attempt to tax interest received on two
multifamily housing revenue bonds (the Bonds) issued by the
Housing Authority of the County of Riverside, California (the
Housing Authority). The ultimate issue for decision is whether
interest on the Bonds is excludable from gross income under
section 103(a). This, in turn, will depend on the applicability
of section 148(f). References to section 103 are to that section
of the Internal Revenue Code of 1954,1 as amended, and references
to section 148 are to that section of the Internal Revenue Code
of 1986.2
Some of the facts have been stipulated and are found
accordingly. The stipulations of fact and attached exhibits are
1We apply sec. 103 of the 1954 Code as in effect for Feb.
20, 1986, instead of the 1986 Code, because (1) sec. 1301 of the
Tax Reform Act of 1986 (TRA), Pub. L. 99-514, 100 Stat. 2085,
2602, which amended sec. 103, became effective for bonds issued
after Aug. 15, 1986, TRA sec. 1311(a), 100 Stat. 2659, and (2)
the bonds we deal with were issued before that date.
2We apply sec. 148(f) of the 1986 Code, because (1) TRA sec.
1314(d)(1), 100 Stat. 2664, provides that sec. 103 of the 1954
Code shall be treated as including the requirements of sec.
148(f) of the 1986 Code for bonds issued after Dec. 31, 1985, and
(2) we conclude, infra, that the bonds we deal with were issued
after that date.
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