Smith's Heating, Inc. v. Commissioner

OPINION.

HaRROn, Judge:

The petitioner was not an acquiring corporation within the meaning of section 740. It was not in existence prior to January 1, 1940; therefore, it was not entitled to an excess profits credit under section 713 of the 1939 Code computed on average base period net income.

The Commissioner allowed an excess profits credit based on total invested capital under section 714 in the amount of $365.20. Petitioner’s total invested capital, for the purpose of the credit, amounted to $4,564.99, which represents paid-in capital of $200, and earned surplus of $4,364.99. The credit was…