Package Mach. Co. v. Commissioner
United States Board of Tax Appeals
In addition to the regular salaries paid in cash to its officers, who were rendering valuable services of a specialized nature, petitioner, prior to the tax year, provided that, after setting aside out of net profits certain amounts for sinking fund and dividend purposes, "25% of the balance of the net earnings shall be paid to the officers aforesaid in the proportion hereinafter set forth, said payment to be made in common stock of the company at par."
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In addition to the regular salaries paid in cash to its officers, who were rendering valuable services of a specialized nature, petitioner, prior to the tax year, provided that, after setting aside out of net profits certain amounts for sinking fund and dividend purposes, "25% of the balance of the net earnings shall be paid to the officers aforesaid in the proportion hereinafter set forth, said payment to be made in common stock of the company at par." Held, the liability of petitioner to its officers under the agreement was not for a specific sum in terms of dollars and cents, but for a…
1Opinion of the Court
*986OPINION.
Arundell:
The deduction claimed by the petitioner in its return and allowed by the respondent for compensation for personal services actually rendered amounted to $117,615.17, which is the total of cash paid, $71,065.17, plus the par value, $46,550, of stock issued under the resolution of July 21, 1921. The petitioner contends it is entitled to a deduction of $170,682.17, this being the total of cash paid, plus the fair market value, $99,617, of the stock so issued, and represents an increase of $53,067 over the amount deducted and allowed. This increase of $58,067, it will be noted,…
2Cases cited4 opinions
- Haskell & Barker Car Co. v. CommissionerUnited States Board of Tax Appeals · 1928
- In re Stoddard Bros. Lumber Co.District Court, D. Idaho · 1909
- Commercial Inv. Trust Corp. v. CommissionerUnited States Board of Tax Appeals · 1933
- Hub Dress Mfg. Co. v. CommissionerUnited States Board of Tax Appeals · 1924
3Cited by1 opinion
- Package Mach. Co. v. CommissionerUnited States Board of Tax Appeals · 1933