Baltimore Steam Packet Co. v. Commissioner
United States Board of Tax Appeals
In 1935 petitioner was indebted to 3 banks and it executed a written agreement with them that, effective January 1, 1936, any net income, as "net income" is defined by accounting regulations of the Interstate Commerce Commission, accruing during the life of the loans, should be applied pro rata in reduction of the loans. Petitioner's net income for 1936 was $25,490.23 and all of this was paid to the 3 banks.
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In 1935 petitioner was indebted to 3 banks and it executed a written agreement with them that, effective January 1, 1936, any net income, as "net income" is defined by accounting regulations of the Interstate Commerce Commission, accruing during the life of the loans, should be applied pro rata in reduction of the loans. Petitioner's net income for 1936 was $25,490.23 and all of this was paid to the 3 banks. Held, (1) that, for purposes of section 26(c)(2) of the Revenue Act of 1936, the contractual provision requiring all of petitioner's "net income" to be applied to the loans was a…
1Opinion of the Court
*631OPINION.
HaeRON :
In the computation of the surtax imposed by section 14 of the 1936 Act on its income tax return for the taxable year petitioner *632took a credit “for contracts restricting dividend payments” in the amount of $25,490.23. In the statement attached to the deficiency notice respondent disallowed the credit in full.
The sole question before the Board for determination is whether in the computation of the surtax imposed by section 14 petitioner is entitled to a credit of $25,490.23 under section 26 (c) (2), the provisions of Which are as follows:
SEO. 26. CREDITS OP CORPORATIONS.
In the…
2Cases cited1 opinion
- Helvering v. Northwest Steel Rolling Mills, Inc.Supreme Court of the United States · 1940
3Cited by2 opinions
- Scofield v. Valley Pipe Line Co.Court of Appeals for the Fifth Circuit · 1943
- Baltimore Steam Packet Co. v. CommissionerUnited States Board of Tax Appeals · 1941