Pleasant Summit Land Corp. v. Commissioner
United States Court of Appeals for the Third Circuit
863 F.2d 263 (1988)
Relevant factsFree
Pleasant Summit Land Corporation (plaintiff) purchased property using a nonrecourse mortgage exceeding the property's actual fair market value, and took depreciation deductions based on the full loan amount; the IRS Commissioner (defendant) disallowed the portion of the deductions exceeding fair market value, the tax court agreed with the Commissioner, and Pleasant Summit appealed.
IssueFree
Whether, under federal tax law, depreciation deductions are allowed for a nonrecourse mortgage exceeding fair market value if the loan's purpose was solely to generate those deductions.