Sibley, Lindsay & Curr Co. v. Commissioner
United States Tax Court
Petitioner paid $ 16,500 legal and investment counsel fees in connection with a revision of its capital structure. Of the three proposals submitted to petitioner it was able only to carry out a recapitalization of its stock. Two additional proposals, (1) a merger of its subsidiary with petitioner and (2) a refinancing of the six per cent noncallable bonds of petitioner and its subsidiary were abandoned by petitioner. $ 11,000 was attributable to the abandoned proposals.
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Petitioner paid $ 16,500 legal and investment counsel fees in connection with a revision of its capital structure. Of the three proposals submitted to petitioner it was able only to carry out a recapitalization of its stock. Two additional proposals, (1) a merger of its subsidiary with petitioner and (2) a refinancing of the six per cent noncallable bonds of petitioner and its subsidiary were abandoned by petitioner. $ 11,000 was attributable to the abandoned proposals. Held, petitioner is entitled to deduct $ 11,000 as ordinary and necessary expense.
1Opinion of the Court
OPINION.
Black, Judge:
The only question for decision is whether respondent erred in disallowing a deduction of $16,500 paid by petitioner for legal and investment counsel fees in connection with a revision of its capital structure. Petitioner concedes that $5,500 was properly disallowed, but contends that $11,000 of the fees represents payments in connection with two abandoned plans for revising its capital structure and therefore represents a deductible expense.
Respondent contends that the entire $16,500 represents a payment to increase the capital value of petitioner’s property and therefore…
2Cases cited1 opinion
- Le Mond v. CommissionerUnited States Tax Court · 1949
3Cited by14 opinions
- A.E. Staley Mfg. Co. v. CommissionerUnited States Tax Court · 1995
- In Re Federated Department Stores, Inc.United States Bankruptcy Court, S.D. Ohio · 1992
- Tobacco Products Export Corp. v. CommissionerUnited States Tax Court · 1952
- United Dairy Farmers, Inc. v. United StatesCourt of Appeals for the Sixth Circuit · 2001
- Haspel v. CommissionerUnited States Tax Court · 1974
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