Georgia Marble Co. v. Commissioner
United States Board of Tax Appeals
On November 1, 1926, petitioner executed a first mortgage trust indenture with a trust company as trustee, wherein petitioner agreed, among other things, "that no dividends shall be paid in any event that would reduce the net quick assets of the Company below five hundred thousand dollars."
Read the full summary
On November 1, 1926, petitioner executed a first mortgage trust indenture with a trust company as trustee, wherein petitioner agreed, among other things, "that no dividends shall be paid in any event that would reduce the net quick assets of the Company below five hundred thousand dollars." Upon the evidence, held, petitioner's net quick assets on December 31, 1936, were in excess of $500,000 and that to the extent of this excess, petitioner could have paid a cash dividend in 1936; held, further, that in determining the credit which petitioner is entitled to receive under section 26(c)(1) of…
1Opinion of the Court
*556OPINION.
Black:
The sole remaining issue for our determination is whether, in computing the surtax on undistributed profits under section 14 of the Revenue Act of 1936, petitioner is entitled to a “credit” such as is provided in section 26 (c) (1) of the same act, relating to contracts restricting dividends. This latter section is set forth in the margin.1
The respondent in his deficiency notice took the position that the first mortgage trust indenture executed November'1, 1926, did not constitute a contract restricting the payment of dividends within the meaning of section 26 (c) (1), supra,…
2Cited by1 opinion
- Georgia Marble Co. v. CommissionerUnited States Board of Tax Appeals · 1942