Proctor Shop, Inc. v. Commissioner

*725OPINION.

Anundell :

The first question is whether petitioner’s payments to Aaron Holtz of 6 percent on his “ debenture preference stock ” were payments of dividends or interest. Petitioner claims that the real relation between it and Holtz was that of debtor and creditor and the annual sums paid are deductible as interest on borrowed money.

This question has been presented a number of times to the Board and the courts under slightly varying facts. In some cases the so-called stock was to be retired at a fixed date, Arthur R. Jones Syndicate, 6 B.T.A. 853; reversed, 23 Fed. (2d) 833, and in…