Letz v. Commissioner
United States Board of Tax Appeals
Petitioner's decedent was president of the X corporation from 1930 until his death in February 1936. X made a practice of paying part of its officers' salaries in cash and giving them negotiable demand notes for the balance, taking as deductions from its income the entire amount of such salaries. This practice coincided with the wishes of its officers, who considered these notes the best investments they could make. X was solvent and the notes were worth their face amount.
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Petitioner's decedent was president of the X corporation from 1930 until his death in February 1936. X made a practice of paying part of its officers' salaries in cash and giving them negotiable demand notes for the balance, taking as deductions from its income the entire amount of such salaries. This practice coincided with the wishes of its officers, who considered these notes the best investments they could make. X was solvent and the notes were worth their face amount. Decedent received notes of X during the years 1930 to 1935, inclusive. He reported two of these notes as income, but did…
1Opinion of the Court
*1014OPINION.
Kern:
As previously stated, the sole issue for our determination is whether the Commissioner correctly included within the taxable income of decedent for the period January 1 to February 25, 1936 (the date of his death), the total of certain amounts credited to decedent on the books of the Letz Manufacturing Co. prior to January 1, 1936, which credits were evidenced by negotiable notes payable on demand then held by decedent. As set forth in our findings of fact, part of this amount was attributable to back salary and interest thereon and the remaining $1,500 was by reason of a credit…
2Cases cited2 opinions
- Corliss v. BowersSupreme Court of the United States · 1930
- Helvering v. Estate of EnrightSupreme Court of the United States · 1941
3Cited by4 opinions
- Ross v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1948
- Estate of Lynch v. CommissionerUnited States Tax Court · 1944
- Letz v. CommissionerUnited States Board of Tax Appeals · 1941
- St. Denis Sec. Co. v. CommissionerUnited States Tax Court · 1957