Clyde Bacon, Inc. v. Commissioner
United States Tax Court
1. Petitioner issued securities, called "debenture certificates," in which it acknowledged itself indebted to the holder for the repayment of the principal at a definite due date, with interest at 6 percent, payable semiannually, with the option to defer interest payments for four years if petitioner's cash position should so warrant, but delinquency thereafter making the principal immediately due and collectible, the securities being subordinate to creditors but superior to…
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1. Petitioner issued securities, called "debenture certificates," in which it acknowledged itself indebted to the holder for the repayment of the principal at a definite due date, with interest at 6 percent, payable semiannually, with the option to defer interest payments for four years if petitioner's cash position should so warrant, but delinquency thereafter making the principal immediately due and collectible, the securities being subordinate to creditors but superior to holders of common stock, the only stock issuable under petitioner's articles of incorporation. The securities were…
1Opinion of the Court
OPINION.
Van Fossan, Judge:
The first issue presents the question whether the petitioner’s debenture certificates are evidences of indebtedness or of a proprietary stock interest in the corporation.
It is a familiar truism in cases of this kind that no universal rule can be laid down to control a decision, but that all facts of record must be considered and given their appropriate respective weight in arriving at a correct conclusion.
In Charles L. Huisking & Co., 4 T. C. 595, we set forth some of the factors commonly relied upon to determine the character of the security. They are: The name;…
2Cases cited3 opinions
- Raybestos-Manhattan, Inc. v. United StatesSupreme Court of the United States · 1935
- Morley Cypress Trust, Schedule "B" v. CommissionerUnited States Tax Court · 1944
- Kell v. CommissionerUnited States Board of Tax Appeals · 1934
3Cited by4 opinions
- Artistic Venetian Blind Corp. v. CommissionerUnited States Tax Court · 1956
- Clyde Bacon, Inc. v. CommissionerUnited States Tax Court · 1945
- Roosevelt Hotel, Inc. v. CommissionerUnited States Tax Court · 1953
- United Theatres, Inc. v. CommissionerUnited States Tax Court · 1953