Golden Belt Lumber Co. v. Commissioner
United States Tax Court
Debenture preferred stock issued in exchange for preferred shares; bearing interest at 4 percent, payable semiannually; subordinate to the claims of bank creditors; and payable at the expiration of corporate existence, held, not to represent an indebtedness of the company and payments thereon held not deductible as interest.
1Opinion of the Court
OPINION.
Smith, Judge:
This proceeding is for the redetermination of a deficiency in income tax for the calendar year 1938 in the amount of $291.71.
In its income tax return for the calendar year 1938 the petitioner claimed the deduction from gross income of $5,955.04 as interest paid to holders of debenture preferred stock. The deduction was disallowed by the respondent who held in his deficiency notice “that the payment does not represent interest paid or accrued within the year on indebtedness and is not deductible as interest or otherwise.” The petitioner claims that the respondent erred in…
2Cited by9 opinions
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