Pacific Grape Products Co. v. Commissioner
United States Board of Tax Appeals
1. A corporation is not entitled to a dividends paid credit under section 27(a) of the Revenue Act of 1936, to the extent that the dividend checks were endorsed back to the corporation by the stockholders before the effective dividend declaration date. 2. A credit for dividends paid is allowable, following Valley Tractor & Equipment Co.,42 B.T.A. 311, where the dividend checks were not endorsed back to the corporation until after they had become due and payable.
1Opinion of the Court
*917OPINION.
Leech :
The question at issue is whether or not the petitioner is entitled to a credit for dividends paid under the provisions of section *91827 (a) of the Revenue Act of 1936,1 in ascertaining its undistributed net income upon which a surtax is imposed pursuant to section 14 (b) of that act.2 The term “undistributed net income” is defined in section 14 (a) (2).3
Respondent determined the deficiency on the following ground:
It is held that by these devices no dividend was paid in the year 1936. Since an actual payment of dividends to stockholders within the year 1936 was required by Section 27…
2Cases cited4 opinions
- New Colonial Ice Co. v. HelveringSupreme Court of the United States · 1934
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Wabash Railway Co. v. BarclaySupreme Court of the United States · 1930
- Bailes v. KeckCalifornia Supreme Court · 1927
3Cited by6 opinions
- Royal Mfg. Co. v. CommissionerCourt of Appeals for the Third Circuit · 1943
- Capital Estates, Inc. v. CommissionerUnited States Board of Tax Appeals · 1942
- Cylindrical Co. v. CommissionerUnited States Tax Court · 1944
- J. R. Holsey Sales Co. v. CommissionerUnited States Tax Court · 1945
- O'Connor v. Comm'rUnited States Tax Court · 1954
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