- 33 -
paid for the mortgage. See Rev. Rul. 78-182, 1978-1 C.B. 265,
266; Rev. Rul. 58-234, 1958-1 C.B. at 285 (“[W]here a ‘put’
option is exercised, the amount (premium) received by the writer
(issuer or optionor) for granting it constitutes an offset
against the option price, which he paid upon its exercise, in
determining his (net) cost basis of the securities that he
purchased pursuant thereto, for subsequent gain or loss
purposes.”). In those instances when an originator failed to
deliver a multifamily mortgage to petitioner within the delivery
period, petitioner realized income in the year that an originator
allowed the option to lapse. See Rev. Rul. 58-234, supra.
Finally, respondent relies on Chesapeake Fin. Corp. v.
Commissioner, 78 T.C. 869 (1982), to support his argument against
treating the nonrefundable portion of the commitment fee as
option premium. In Chesapeake Fin. Corp., the taxpayer made
construction and permanent loans available to developers and
received commitment fees. Typically, a borrower would apply for
a loan for a proposed project, and the taxpayer would determine
whether the project was economically feasible. If the taxpayer
decided the project was feasible, it would obtain the borrower’s
authorization to place a loan with an institutional investor. If
the institutional investor approved the loan, it issued a
commitment to the taxpayer; upon acceptance, the commitment
constituted a contract between the institutional investor and the
taxpayer. The commitment specified the terms of the proposed
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