Snap-Drape v. Commissioner
United States Tax Court
During taxable year 1990, P made contributions to its ESOP in the amount of $ 240,732 and claimed a deduction for the entire amount under sec. 404(a), I.R.C.
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During taxable year 1990, P made contributions to its ESOP in the amount of $ 240,732 and claimed a deduction for the entire amount under sec. 404(a), I.R.C. P also paid to the ESOP a cash dividend with respect to its common stock in the amount of $ 1,440,000. The ESOP transferred the entire amount of the dividend to the Bank as payment of interest and principal under a note, executed for purposes of purchasing securities of P. On its 1990 Federal income tax return, P claimed a deduction with respect to the cash dividend paid to the ESOP in the amount of $ 1,440,000 under sec. 404(k), I.R.C.…
1Opinion of the Court
SNAP-DRAPE, INC., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Snap-Drape v. Commissioner
Docket No. 2174-93
United States Tax Court
105 T.C. 16; 1995 U.S. Tax Ct. LEXIS 38; 105 T.C. No. 2; 19 Employee Benefits Cas. (BNA) 1592;
July 13, 1995, Filed
Decision will be entered under Rule 155.
During taxable year 1990, P made contributions to its ESOP in the amount of $ 240,732 and claimed a deduction for the entire amount under sec. 404(a), I.R.C. P also paid to the ESOP a cash dividend with respect to its common stock in the amount of $ 1,440,000. The ESOP transferred the entire amount of…
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