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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