Elgin Nat'l Watch Co. v. Commissioner
United States Board of Tax Appeals
1. During the taxable year, petitioner created, by appropriate instruments, two trusts for the payment of pensions to former employees and officers.
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1. During the taxable year, petitioner created, by appropriate instruments, two trusts for the payment of pensions to former employees and officers. Held that the net income of the trusts is not taxable to petitioner, and that the securities and cash contributed to the funds held in trust are deductible from gross income as ordinary and necessary business expenses. 2. Where an inventory of goods in process and finished goods on hand at the close of a taxable year is taken at cost, it should include the amount of bonuses paid to employees who participated in the production of the goods…
1Opinion of the Court
*357OPINION.
Arundell :
In his determination of petitioner’s tax liability for the taxable year, the respondent not only taxed it on the net income of the two pension funds, amounting to $5,886.30, but disallowed as deductions for ordinary and necessary business expenses the cost of the securities assigned to the trustees of the funds, totaling $270,029.61; the cash payment of $39,970.39 to thé special fund; and the item of $25,000 accrued on its books April 30, 1919, for liability as a contributor to the general fund. The respondent’s action in each instance was based upon the ground that the…
2Cases cited9 opinions
- Kingsbury v. BurnsideIllinois Supreme Court · 1871
- Orr v. YatesIllinois Supreme Court · 1904
- Fox v. FoxIllinois Supreme Court · 1911
- Fisher v. FieldsCourt for the Trial of Impeachments and Correction of Errors · 1812
- Hagan v. VarneyIllinois Supreme Court · 1893
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3Cited by1 opinion
- Elgin Nat'l Watch Co. v. CommissionerUnited States Board of Tax Appeals · 1929