Moxa Bldg. Co. v. Commissioner
United States Board of Tax Appeals
During 1926 petitioner entered into a contract with certain individuals, one of whom was its principal stockholder, that if they would advance money to finance the purchase of certain property it would pay to them all of its profits as compensation for the loan and for the performance of certain services. Held, that the amount of profits distributed to the individuals is not a legal deduction from gross income.
1Opinion of the Court
opinion.
Smith :
This is a proceeding for the redetermination of a deficiency in income tax for 1926 of $14,007.34. The question in issue is the right of th© petitioner to deduct from its gross income $102,000 representing amounts paid to certain individuals who had financed the operations of the petitioner. Petitioner claims the deduction either as interest paid upon loans or as ordinary and necessary expenses in carrying on its business.
The petitioner was incorporated prior to April 9, 1926. It had a capital stock, divided into 20 shares, 19 of which were owned by Robert B. Bowler and one by…
2Cases cited2 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Traylor Engineering & Mfg. Co. v. LedererCourt of Appeals for the Third Circuit · 1921
3Cited by4 opinions
- National Contracting Co. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1939
- Abilene Life Ins. Co. v. CommissionerUnited States Tax Court · 1943
- Moxa Bldg. Co. v. CommissionerUnited States Board of Tax Appeals · 1934
- National Contracting Co. v. CommissionerUnited States Board of Tax Appeals · 1938