First Nat'l Bank v. Commissioner
United States Board of Tax Appeals
Petitioner, a national bank, paid $10,000 under an agreement whereby additional capital was raised and paid over to an out of town bank in consideration for the latter taking over the assets and assuming all the liabilities of a local state bank which was about to be closed by the state banking authorities. Held: (1) That petitioner's contract was a valid exercise of its incidental powers as a national bank.
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Petitioner, a national bank, paid $10,000 under an agreement whereby additional capital was raised and paid over to an out of town bank in consideration for the latter taking over the assets and assuming all the liabilities of a local state bank which was about to be closed by the state banking authorities. Held: (1) That petitioner's contract was a valid exercise of its incidental powers as a national bank. (2) That, since the expenditure was made to protect petitioner's business, its depositors, and its stockholders, it is an ordinary and necessary expense within the meaning of section…
1Opinion of the Court
opinion.
Van Fossan:
This proceeding involves a deficiency of $869.33 in income taxes for the calendar year 1931. The question presented is whether the taxpayer is entitled to a $10,000 deduction, being the amount paid by petitioner to a second bank in consideration of such bank assuming the liabilities of a certain trust company, for the alleged purpose of protecting petitioner against losses that would have resulted if the trust company had been involuntarily closed.
Throughout the calendar -year 1931 petitioner conducted a banking business in Skowhegan, Maine. During the early part of 1931…
2Cases cited24 opinions
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- California Bank v. KennedySupreme Court of the United States · 1897
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