Monte Glove Co. v. Commissioner
United States Board of Tax Appeals
1. All the stockholders of a corporation by petition addressed to its board of directors authorized and consented to a dividend distribution not in proportion to stockholdings, but in proportions which would result in payments to two stockholders who gave all their time to the business of the corporation in amounts larger than they would have received if the distribution had been pro rata.
Read the full summary
1. All the stockholders of a corporation by petition addressed to its board of directors authorized and consented to a dividend distribution not in proportion to stockholdings, but in proportions which would result in payments to two stockholders who gave all their time to the business of the corporation in amounts larger than they would have received if the distribution had been pro rata. Held, such dividend distribution was preferential within the meaning of section 27(g), Act of 1936. 2. Held, on the facts, that compensation paid to one of petitioner's officers was unreasonable and…
1Opinion of the Court
*541OPINION.
Kern :
The first issue for our decision here is whether petitioner is entitled to a dividends paid credit pursuant to section 27 (a) of the Revenue Act of 1936, or whether it is precluded from such credit by virtue of section 27 (g) of the same act and article 27 (g)1-! of Regulations 94. Both of these sections of the act, together with this article of the regulations, are set out in the margin.1
*542Without considering the question raised by the contract of Young and Soller to purchase the stock in petitioner owned by the so-called Montgomery interests, the factual background may be…
2Cases cited3 opinions
- Richter & Co. v. LightSupreme Court of Connecticut · 1922
- New Jersey Car Spring & Rubber Co. v. FieldsSupreme Court of New Jersey · 1913
- Farquhar v. Canada-Atlantic & Plant Steamship Co.Massachusetts Supreme Judicial Court · 1912
3Cited by3 opinions
- Astorian-Budget Publishing Co. v. CommissionerUnited States Board of Tax Appeals · 1941
- Monte Glove Co. v. CommissionerUnited States Board of Tax Appeals · 1941
- Transportation Serv. Assocs. v. CommissionerUnited States Tax Court · 1944