Maloney Electric Co. v. Commissioner
United States Board of Tax Appeals
1. The amount paid by petitioner to induce a solvent bank to assume the liabilities of another, under the same circumstances as those existing in Robert Gaylord, Inc.,41 B.T.A. 1119, held, following that case to be deductible as ordinary and necessary expenses of carrying on its business, the evidence indicating that such payment was made to preserve, protect and promote petitioner's busness. 2. Contract between petitioner and its creditor executed prior to May 1, 1936,…
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1. The amount paid by petitioner to induce a solvent bank to assume the liabilities of another, under the same circumstances as those existing in Robert Gaylord, Inc.,41 B.T.A. 1119, held, following that case to be deductible as ordinary and necessary expenses of carrying on its business, the evidence indicating that such payment was made to preserve, protect and promote petitioner's busness. 2. Contract between petitioner and its creditor executed prior to May 1, 1936, required that 20 percent of its net earnings in excess of $320,000 for the next preceding year, on the first day of June of…
1Opinion of the Court
*82OPINION.
Meixott:
The first question is: Did the Commissioner err in disallowing the deduction of $4,150.52? Petitioner, like the taxpayer in Robert Gaylord, Inc., 41 B. T. A. 1119, claims that the deduction *83should be allowed as a loss not compensated for by insurance or otherwise ; as an ordinary and necessary expense paid or incurred during the taxable year in carrying on its business; or as a debt ascertained to be worthless and charged off. These allegations are denied in the respondent’s answer and he makes substantially the same argument as advanced by him in the Gaylord case.
It is…
2Cases cited2 opinions
- New Colonial Ice Co. v. HelveringSupreme Court of the United States · 1934
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
3Cited by5 opinions
- Helvering v. Moloney Electric Co.Court of Appeals for the Eighth Circuit · 1941
- Connor Lumber & Land Co. v. United StatesDistrict Court, W.D. Wisconsin · 1949
- First Natl. Bank v. CommissionerUnited States Tax Court · 1943
- Hessert v. CommissionerUnited States Tax Court · 1943
- Maloney Electric Co. v. CommissionerUnited States Board of Tax Appeals · 1940