The US Tax Court has allowed a deduction for the interest on a loan when the loan was part of a transaction that was disregarded for lack of economic substance but the loan was available for a taxpayer to use in its banking business (Bank of New York Mellon Corporation, as Successor in Interest to The Bank of New York Company, Inc. v. Commissioner of Internal Revenue, 140 T.C. Memo. 2013-225, Docket No. 26683-09 (23 September 2013)).
The case was a follow-up to a previous decision by the U…