Finance & Inv. Corp. v. Commissioner

OPINION.

Lansdon:

The respondent has asserted a deficiency in income tax for the year 1925 in the amount of $152.76. The only error pleaded *644by petitioner is that respondent has improperly disallowed as deductions from gross income certain amounts paid in the taxable year as dividends on outstanding preferred stock. It is the theory of the petitioner, a Delaware corporation with its operating office in Washington, D. C., that such payments were interest on indebtedness and that the owners of the preferred stock in question were its creditors and not stockholders.

The petitioner’s certificate of…