John R. Hernandez - Page 1

                                 T.C. Memo. 1998-329                                  

                               UNITED STATES TAX COURT                                

                          JOHN R. HERNANDEZ, Petitioner v.                            
                    COMMISSIONER OF INTERNAL REVENUE, Respondent*                     

               Docket No. 17244-96.               Filed September 21, 1998.           

                    The Court granted P's Motion for Reconsideration                  
               of Hernandez v. Commissioner, T.C. Memo. 1998-46, which                
               held that interest received on redemption of tax                       
               certificates sold at public auction by Pasco County,                   
               Florida, for nonpayment of property taxes was not                      
               excluded from P's gross income under I.R.C. sec. 103(a)                
               as interest earned on State or local obligations.  The                 
               ground of decision was that tax certificates are not                   
               issued by a State or political subdivision in exercise                 
               of its sovereign borrowing power and therefore are not                 
               obligations of a State or political subdivision for                    
               purposes of I.R.C. sec. 103.                                           
                    On reconsideration, P asserts that the portion of                 
               the interest paid on redemption of tax certificates                    
               that is attributable to special assessments (in                        
               contrast to ad valorem taxes) is excluded from his                     

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