Kena, Inc. v. Commissioner
United States Board of Tax Appeals
The amount paid to petitioner pursuant to its contract with an individual covering the loan of a principal sum and measured by a percentage of profits earned by the individual, held to constitute interest. Consequently, petitioner is a personal holding company, as defined by section 351(b)(1) of the Revenue Act of 1934, and is subject to the tax prescribed by section 351(a).
1Opinion of the Court
*219OPINION.
Van Fossan :
The respondent has pitched his entire argument on the interpretation of the word “interest” as used in section 351 (b) (1) (!A). The petitioner contends that the sum received by it pursuant to the contract with deMauriac was not interest and did not represent “gains from the sale of stock or securities.” If such payment is determined to be either interest or gains from the sale of stock or securities, the section automatically applies to the situation before us since the facts of the case bring it within the provisions of the other subsection (section 351 (b) (1) (B)). It…
2Cases cited4 opinions
- Old Colony Railroad v. CommissionerSupreme Court of the United States · 1932
- United States v. SullivanSupreme Court of the United States · 1927
- Avery v. CommissionerSupreme Court of the United States · 1934
- DeGanay v. LedererSupreme Court of the United States · 1919
3Cited by12 opinions
- Salyersville National Bank v. United StatesCourt of Appeals for the Sixth Circuit · 1980
- Dorzback v. Collison, Collector of Internal RevenueCourt of Appeals for the Third Circuit · 1952
- Portage Plastics Company v. United StatesDistrict Court, W.D. Wisconsin · 1969
- Dorzback v. CollisonDistrict Court, D. Delaware · 1950
- Gokey Properties, Inc. v. CommissionerUnited States Tax Court · 1960
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