- 9 - interest. Respondent contends that the amount involved is the greater of the "interest actually charged" (i.e., the 10.5- percent stated interest rate) or the fair market interest. Respondent relies on Thoburn v. Commissioner, 95 T.C. 132, 139 (1990), and Janpol v. Commissioner, 101 T.C. 518, 529 (1993), as support for this contention. In Thoburn, the Court paraphrased the regulations' "amount paid" language as "interest actually charged". See Thoburn v. Commissioner, supra at 139. The Court's statement is dicta. In Janpol, the Court repeated this statement without discussion or necessity. See Janpol v. Commissioner, supra at 529. In these cases, it is not clear whether "interest actually charged" means interest stated, billed, or paid. We hold that, in the case of a loan, the "amount involved" is the greater of the interest paid or the fair market value of the use of the loan proceeds. Our holding and the Treasury regulations are consistent with the statute's express language. The statute refers to the greater of "money and * * * other property given" or "money and * * * other property received". See sec. 4975(f)(4). In the case of a loan, the money "given" and "received" is the interest paid by one party and received by the other. "Interest actually charged" can be interpreted as the stated or billed interest, and such interest is not, necessarily, "given" or "received".Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
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