Hub Dress Mfg. Co. v. Commissioner
United States Board of Tax Appeals
A corporation may not deduct the value of securities transferred by it to its principal stockholder in consideration of his agreement to transfer at the request of the corporation from time to time, portions of the capital stock owned by him directly to employees of the corporation. The corporation may deduct as salaries paid the value of its stock transferred to such employees at the time when such transfers take place.
1Opinion of the Court
*198OPINION.
Trammell:
The taxpayer claims the right to deduct the entire amount of $22,688.74, which is the value of the securities it transferred to Hyman Kohn in the taxable year in question in considera*199tion of his agreeing to transfer to Samuel and Mark Kohn the shares of stock referred to in the statement of facts. It is claimed that this amount was compensation for services of said employees which was required to be paid during the taxable year. It appears, however, that the value of securities which the corporation turned over to Hyman Kohn during that year was in consideration of what Hyman…
2Cited by3 opinions
- Package Machinery Co. v. CommissionerUnited States Board of Tax Appeals · 1933
- Package Mach. Co. v. CommissionerUnited States Board of Tax Appeals · 1933
- Hub Dress Mfg. Co. v. CommissionerUnited States Board of Tax Appeals · 1924