Gilbert Hahn, Jr. and Margot H. Hahn - Page 2
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Judgment.1 The issue for decision concerns discharge of
indebtedness income pursuant to section 61(a)(12). For the
reasons stated below, we shall deny petitioner’s motion. Unless
otherwise indicated, all Rule references are to the Tax Court
Rules of Practice and Procedure, and all section references are
to the Internal Revenue Code, as amended.
Petitioners resided in Washington, D.C., when the petition
was filed. References to petitioner in the singular are to
Gilbert Hahn, Jr.
During 1986, petitioner obtained a $1 million line of credit
from the National Bank of Washington (the bank), which was later
increased to $2 million. During June 1988, petitioner borrowed
against the line of credit and gave the bank a promissory note in
the amount of $2 million (the note). The note provides, inter
alia: (1) The outstanding principal and interest shall be
payable on demand; (2) until demand is made, petitioner shall pay
interest quarterly on the unpaid principal balance at the bank’s
floating prime rate plus ½ percent; (3) in the event of a late
payment, petitioner shall pay a late charge of 2 percent per
1 Petitioner and his wife, Margot Hahn, filed a joint 1995
Federal income tax return and a joint petition with the Court.
Petitioner Margot Hahn now seeks relief from joint and several
liability pursuant to sec. 6015, and each petitioner has retained
separate counsel. Petitioner Margot Hahn did not join petitioner
Gilbert Hahn, Jr. in making the instant motion.
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Last modified: November 10, 2007