Alger-Sullivan Lumber Co. v. Commissioner of Int. Rev.

FOSTER, Circuit Judge.

Pursuant to written agreements, in 1921 petitioner transferred on its books and delivered 150 shares of its capital stock, having a market value of $18,375.00, to four of its employees. Treating these transactions as the payment of bonuses as reasonable and extra compensation for services rendered by tho said employees, petitioner deducted the amount as an expense of doing business. The Commissioner ruled against this contention, and held that the transfers of stock were outright sales and not deductible. A deficiency, of $1,766.43 was determined against petitioner. On…