E. C. Atkins & Co. v. Commissioner
United States Board of Tax Appeals
1. Petitioner in 1932 borrowed a large amount from a bank and agreed in writing to pay no dividend on its capital stock so long as the loan was unpaid, but with a proviso that the agreement should not prevent petitioner from distributing any stock dividend. During the taxable year the loan was unpaid and petitioner had no surplus subject to capitalization.
Read the full summary
1. Petitioner in 1932 borrowed a large amount from a bank and agreed in writing to pay no dividend on its capital stock so long as the loan was unpaid, but with a proviso that the agreement should not prevent petitioner from distributing any stock dividend. During the taxable year the loan was unpaid and petitioner had no surplus subject to capitalization. Held, petitioner is entitled to credit under section 26(c)(1), Act of 1936. Columbia River Paper Mills,43 B.T.A. 263; Paraport Theatre Leasing Corporation,44 B.T.A. 108. 2. The fact that petitioner had cash sufficient to pay the balance of…
1Opinion of the Court
*443OPINION.
Kern :
Tlie problem presented to us in this proceeding involving section 26 (c) (1) of the Eevenue Act of 1936, set out in the margin,1 is, to a large extent, similar to that presented in the recent case of Columbia River Paper Mills, 48 B. T. A. 263. In that case the contract obligated the taxpayer corporation to “neither declare nor pay any cash dividend * * (Emphasis supplied.) We held that under the circumstances of that case “the petitioner could not have made any distribution to its stockholders except in the form of cash.” We determined that a distribution in any form other than…
2Cases cited1 opinion
- Eisner v. MacOmberSupreme Court of the United States · 1920
3Cited by3 opinions
- E. C. Atkins & Co. v. CommissionerUnited States Board of Tax Appeals · 1941
- Northwest Bancorporation v. CommissionerUnited States Tax Court · 1943
- Pittsburgh Forgings Co. v. CommissionerUnited States Tax Court · 1943