McCoy-Garten Realty Co. v. Commissioner
United States Board of Tax Appeals
1. On the facts in the case, a certain instrument issued by the petitioner and denominated a certificate of preferred stock, held to be stock and not a certificate of indebtedness. 2. Held, that quarterly payments made in accordance with the terms of such stock, were dividends and do not constitute allowable deductions in computing net income. 3. Held, that the discount on the sale of said preferred stock can not be amortized over the life of the issue.
1Opinion of the Court
*858OPINION.
SiefkiN :
The first question for consideration is whether the amounts paid to holders of the preferred stock were, in fact, dividends or Avere interest on borroAved money. This requires a consideration of all of the circumstances surrounding the transaction. What the parties called the instruments is persuasive but not conclusive. See Arthur R. Jones Syndicate v. Commissioner of Internal Revenue, 28 Fed. (2d) 833; Leasehold Realty Co., 3 B. T. A. 1129; Bolinger-Franklin Lumber Co., 7 B. T. A. 402. The petitioner, in support of its contention that the payments made constituted interest…
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- McCoy-Garten Realty Co. v. CommissionerUnited States Board of Tax Appeals · 1928
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