- 7 -
and CD's owned by IFNB are different from ordinary bank loans,7
respondent does not contest petitioner's assertion that the time
deposits (and impliedly, the CD's) arise in the ordinary course
of business, as a customary method used by banks to earn interest
on surplus funds.
Discussion
I. Whether Summary Judgment Is Appropriate
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Florida Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988).
Summary judgment is appropriate where there is no genuine
issue of material fact and decision may be rendered as a matter
of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C.
7 There are factual differences between petitioner's
consumer, commercial, and agricultural loans and its time
deposits and CD's with banks. The consumer, commercial, and
agricultural loans provided for periodic payments of interest,
monthly in most cases, quarterly in a few; as a result, the
accrued but unpaid interest with respect to such loans held at
Dec. 31, 1986, amounted on the average to approximately 1 month's
worth of interest on each loan. The CD's with banks provided for
the payment of interest only at maturity; as a result, the amount
of the accrual with respect to each such instrument was
relatively larger. As evidenced by the schedule, supra p. 5, at
1986 yearend, the remaining accrual period on the CD's, which
bore interest at rates ranging from 7.07 percent to 8.10 percent
per year, was, on the average, closer to 6 months than to 1
month. Although the time deposits with banks also provided for
one payment of interest at maturity, the remaining average
accrual period on the time deposits was relatively much shorter
than for the CD's because of the shorter average period to
maturity of the time deposits.
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