Section 2

Citation: Section 2
Parent Document: United Housing Foundation, Inc. v. Forman, 421 U.S. 837 (1975)
Jurisdiction: United States (federal)
Effective Date: 1975-10-06
Original Source: https://www.courtlistener.com/opinion/109272/united-housing-foundation-inc-v-forman/ ↗

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The Court of Appeals recognized that there must be an expectation of profits for these shares to be securities, and conceded that there is “no possible profit on a resale of [this] stock.” 500 F. 2d, at 1254. The court cor*855rectly noted, however, that profit may be derived from the income yielded by an investment as well as from capital appreciation, and then proceeded to find “an expectation of ‘income’ in at least three ways.” Ibid. Two of these supposed sources of income or profits may be disposed of summarily. We turn first to the Court of Appeals’ reliance on the deductibility for tax purposes of the portion of the monthly rental charge applied to interest on the mortgage. We know of no basis in law for the view that the payment of interest, with its consequent deductibility for tax purposes, constitutes income or profits.20 These tax benefits are nothing more than that which is available to any homeowner who pays interest on his mortgage. See § 216 of Internal Revenue Code, 26 U. S. C. § 216; Eckstein v. United States, 196 Ct. Cl. 644, 452 F. 2d 1036 (1971).

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