L. O. Koven & Bro., Inc. v. Commissioner
United States Board of Tax Appeals
Petitioner, in 1933, entered into a written agreement with the holder of its bond. The agreement provided that from 1933 on petitioner would set aside from its yearly profits, as a reserve, the sum of $15,624.24 (10 percent of the debt). Until the bond was paid only the yearly profits in excess of the amount to be set aside could be used for the payment of dividends. During each of the years 1936 and 1937 petitioner added $15,624.24 to a reserve account set up on its books.
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Petitioner, in 1933, entered into a written agreement with the holder of its bond. The agreement provided that from 1933 on petitioner would set aside from its yearly profits, as a reserve, the sum of $15,624.24 (10 percent of the debt). Until the bond was paid only the yearly profits in excess of the amount to be set aside could be used for the payment of dividends. During each of the years 1936 and 1937 petitioner added $15,624.24 to a reserve account set up on its books. Petitioner at all times had the use and control of the funds in this account, and they were used in its business as…
1Opinion of the Court
OPINION.
Mellott:
The Commissioner determined the following deficiencies in income tax for the calendar years 1936 and 1937:
1936_ $2,767.60
1937_ 4,167.16
Total_ 6, 934. 76
The sole issue is whether respondent erred in denying a credit in the amount of $15,624.24, claimed under section 26 (c) of the Revenue Act of 1936, in computing the surtax for each year on petitioner’s undistributed profits.
The proceeding was submitted upon a stipulation of facts, documents introduced in evidence without objection, and admissions in *468the pleadings. The facts are found to be as stipulated. The following summary…
2Cases cited1 opinion
- Helvering v. Northwest Steel Rolling Mills, Inc.Supreme Court of the United States · 1940
3Cited by2 opinions
- Davidson-Boutell Co. v. CommissionerUnited States Tax Court · 1943
- L. O. Koven & Bro., Inc. v. CommissionerUnited States Board of Tax Appeals · 1942