Verifine Dairy Products Corp. of Sheboygan v. Commissioner

OPINION.

Black, Judge:

Our question in this proceeding is to determine whether each of the two issues of “preferred stock” is, notwithstanding its respective name, in reality capital stock or indebtedness. In determining this question we shall first consider the legal effect of the so-called preferred stock, first issue.

The material provisions of section 23 (b) of the Revenue Acts of 1934 and 1936, and of article 23 (b)-l of Regulations 86 and 94 are identical, respectively, and are set forth in the margin.1

The question of whether a certain obligation is in reality capital stock or indebtedness…