Kentucky River Coal Corp. v. Commissioner
United States Board of Tax Appeals
During the taxable year 1919 the taxpayer had outstanding debenture stock, preferred stock, and common stock. During the year "dividends" were paid upon the debenture stock.
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During the taxable year 1919 the taxpayer had outstanding debenture stock, preferred stock, and common stock. During the year "dividends" were paid upon the debenture stock. Held, upon the evidence, that the shares of debenture stock outstanding were not obligations of the taxpayer for money borrowed, and that the taxpayer was not entitled to deduct from gross income for the year 1919 the dividends paid upon the debenture stock, or an amount for amortized discount upon such stock.
1Opinion of the Court
*648OPINION.
Smith:
The questions here presented are purely legal. The taxpayer claims the right to deduct from gross income of the year 1919 $30,000, representing dividends paid upon $500,000 par value debenture stock outstanding during the year, and $25,000 amortized discount upon such stock. The Commissioner denies the right of the taxpayer to make such deductions. The claim of the taxpayer is that the debenture stock outstanding represents bonds or obligations of the taxpayer, while the claim of the Commissioner is that the debenture stock is a part of the capital stock of the taxpayer.
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2Cases cited6 opinions
- In re Fechheimer Fisher Co.Court of Appeals for the Second Circuit · 1914
- Heller, Hirsch & Co. v. National Marine BankCourt of Appeals of Maryland · 1899
- Rider v. John G. Delker & Sons Co.Court of Appeals of Kentucky · 1911
- Warren v. Queen & Co.Supreme Court of Pennsylvania · 1913
- Reagan Bale Co. v. HeuermannCourt of Appeals of Texas · 1912
1 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- Miele v. CommissionerUnited States Tax Court · 1971
- O. P. P. Holding Corp. v. CommissionerUnited States Board of Tax Appeals · 1934
- Proctor Shop, Inc. v. CommissionerUnited States Board of Tax Appeals · 1934
- Idaho Lumber & Hardware Co. v. CommissionerUnited States Tax Court · 1945
- Kentucky River Coal Corp. v. CommissionerUnited States Board of Tax Appeals · 1926
3 more not listed; retrieve them via the Exa API.