L. S. Ayers & Co. v. Commissioner
United States Board of Tax Appeals
1. The invested capital of a corporation may not be reduced, in determining the extent to which a dividend is paid from current earnings of a year, by a "tentative tax" theoretically set aside out of such earnings pro rata over such year, because the income and profits tax does not become due and payable, and, therefore, does not accrue, until the following year. 2. In determining the invested capital of a corporation for 1918 and the extent to which surplus at the beginning…
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1. The invested capital of a corporation may not be reduced, in determining the extent to which a dividend is paid from current earnings of a year, by a "tentative tax" theoretically set aside out of such earnings pro rata over such year, because the income and profits tax does not become due and payable, and, therefore, does not accrue, until the following year. 2. In determining the invested capital of a corporation for 1918 and the extent to which surplus at the beginning of the year is reduced by a dividend, the actual earned net income, as shown by the corporation's books, is first…
1Opinion of the Court
*1136OPINION.
James :
Two questions are presented for the determination of the Board in this appeal; first, whether, in determining the amount.of income available for the payment of a dividend, the actual net income should be used rather than the statutory taxable net income; and, second, whether earnings during the year available for distribution as dividends should be reduced in computing invested capital by an assumed pro rata accrual of income and profits taxes.
On the first point, we are clear that the Commissioner must be sustained both upon reason and upon the basis of decisions already made…
2Cases cited13 opinions
- Pollock v. Farmers' Loan & Trust Co.Supreme Court of the United States · 1895
- Pollock v. Farmers' Loan & Trust Co.Supreme Court of the United States · 1895
- Edwards v. SlocumSupreme Court of the United States · 1924
- United States v. WoodwardSupreme Court of the United States · 1921
- Clapp v. MasonSupreme Court of the United States · 1877
8 more not listed; retrieve them via the Exa API.
3Cited by44 opinions
- Siegel v. CommissionerUnited States Board of Tax Appeals · 1934
- A. J. Tower Co. v. CommissionerUnited States Board of Tax Appeals · 1929
- All America Cables v. CommissionerUnited States Board of Tax Appeals · 1928
- Atlas Tack Co. v. CommissionerUnited States Board of Tax Appeals · 1928
- Berks Foundry & Mfg. Co. v. CommissionerUnited States Board of Tax Appeals · 1926
39 more not listed; retrieve them via the Exa API.