Helms Bakeries v. Commissioner
United States Board of Tax Appeals
1. Petitioner corporation agreed, in writing, to liquidate an indebtedness at the rate of $10,000 per month and that no cash dividends would be paid until the loan was liquidated. It interpreted the contract as not preventing it from declaring and distributing a stock dividend and this was done. The correct interpretation was placed upon the contract.
Read the full summary
1. Petitioner corporation agreed, in writing, to liquidate an indebtedness at the rate of $10,000 per month and that no cash dividends would be paid until the loan was liquidated. It interpreted the contract as not preventing it from declaring and distributing a stock dividend and this was done. The correct interpretation was placed upon the contract. Held, petitioner is not entitled to any credit under section 26(c)(1) of the Revenue Act of 1936 in computing its undistributed net income. 2. The agreement made by the corporation with its creditor did not expressly deal with the disposition of…
1Opinion of the Court
*315OPINION.
Mellott■:
The petitioner contends it is entitled to a credit for dividends paid in an amount equal to its adjusted net income of $71,675.52, under.section 26- (c) (1) or (2) of the Bevenue Act of *3161936,1 either by reason of a contract restricting the payment of dividends or by reason of a pontract requiring a portion of its earnings and profits of the taxable year to be paid in discharge of a debt. It also contends that, in the event the preferred stock dividends declared and distributed by it during 1936 are held to be taxable, it is entitled to a credit for the purposes of the…
2Cases cited7 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Helvering v. GowranSupreme Court of the United States · 1937
- Helvering v. Northwest Steel Rolling Mills, Inc.Supreme Court of the United States · 1940
- Koshland v. HelveringSupreme Court of the United States · 1936
2 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
- Commissioner of Internal Revenue v. Hirshon TrustCourt of Appeals for the Second Circuit · 1954
- Kaufmann Department Stores Securities Corp. v. CommissionerCourt of Appeals for the Third Circuit · 1944
- Rand Trust v. CommissionerUnited States Tax Court · 1960
- Supplee-Biddle Hardware Co. v. CommissionerCourt of Appeals for the Third Circuit · 1944
- Helms Bakeries v. CommissionerUnited States Board of Tax Appeals · 1942
2 more not listed; retrieve them via the Exa API.