Legal analysis from Dean's Law Dictionary will be displayed here.

This section contains the nature of the case and procedural background.

P bought noninterest-bearing promissory notes from the issuers at prices discounted below the face amounts. Each of the notes was held for more than six months, and, before maturity and in the year of purchase, was sold for less than its face amount but more than its issue price. The gain in each case was the economic equivalent of interest for the use of the money to the date of sale, but P reported the gains as capital gains. D determined that the gains attributable to original issue discount were, but interest in another form and therefore were taxable as ordinary income. P petitioned and prevailed in the District Court and the Court of Appeals. The Supreme Court granted certiorari.

The legal issues presented in this case will be displayed here.

The court's holding and decision will be displayed here.