Main Line Distributors, Inc. v. Commissioner of Internal Revenue

SHACKELFORD MILLER, Jr., Circuit Judge.

The petitioner, Main Line Distributors, Inc., seeks a review of a deficiency income tax assessment in the amount of $6,175.00 for the taxable year ended January 31, 1957. The question involved is whether the petitioner may deduct as an ordinary and necessary business expense an amount paid by it to a lender of corporate stock, which the petitioner borrowed from the lender in carrying out a short sale of said stock. The amount so paid was equivalent to a dividend paid on the borrowed stock to the purchaser of it before the short sale was completed by the…