Gooding Amusement Co. v. Commissioner
United States Tax Court
1. Accruals and payments on short-term notes issued by corporation to its three controlling stockholders, consisting of husband, wife, and infant daughter, held, not interest on indebtedness under section 23 (b), Internal Revenue Code, and, hence not deductible from the corporation's gross income. 2. Payments on the principal of the above mentioned notes, held, to constitute the distribution of taxable dividends under section 115 (a), Internal Revenue Code. 3. Property…
Read the full summary
1. Accruals and payments on short-term notes issued by corporation to its three controlling stockholders, consisting of husband, wife, and infant daughter, held, not interest on indebtedness under section 23 (b), Internal Revenue Code, and, hence not deductible from the corporation's gross income. 2. Payments on the principal of the above mentioned notes, held, to constitute the distribution of taxable dividends under section 115 (a), Internal Revenue Code. 3. Property obtained by petitioner corporation in exchange for its stock and the aforementioned notes, held, to have been acquired in…
1Opinion of the Court
OPINION.
Van Fossan, Judge:
The first question is whether on or about August 24,1946, there was created between petitioner corporation, on the one hand, and petitioners and their infant daughter on the other, a debtor-creditor relationship. If so, the judgment notes issued that day by the corporation were genuine evidences of indebtedness and the amounts accrued thereon by the corporation as interest expense and subsequently paid out in cash to the holders of the notes constituted interest on indebtedness under section 23 (b), Internal Revenue Code of 1939,4 and, hence, proper deductions from…
2Cases cited12 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Higgins v. SmithSupreme Court of the United States · 1940
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- United States v. IshamSupreme Court of the United States · 1873
- United States v. KatzSupreme Court of the United States · 1926
7 more not listed; retrieve them via the Exa API.
3Cited by169 opinions
- Bixby v. CommissionerUnited States Tax Court · 1972
- Litton Business Systems, Inc. v. CommissionerUnited States Tax Court · 1973
- Colony, Inc. v. CommissionerUnited States Tax Court · 1956
- C. M. Gooch Lumber Sales Co. v. CommissionerUnited States Tax Court · 1968
- Baker Commodities, Inc. v. CommissionerUnited States Tax Court · 1967
164 more not listed; retrieve them via the Exa API.