Central Kansas Power Co. v. Commissioner
United States Board of Tax Appeals
1. Two contracts reserving title in the vendor are construed under Kansas law to be chattel mortgages rather than conditional sales. As such, payments on these contracts are payments on an "indebtedness" as defined in section 27(a)(4), Revenue Act of 1938 and I.R.C., and give rise to a dividends paid credit. 2. No dividends paid credit is allowable under section 27(a)(4) for payments on promissory notes given in a prior year in satisfaction of dividends.
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1. Two contracts reserving title in the vendor are construed under Kansas law to be chattel mortgages rather than conditional sales. As such, payments on these contracts are payments on an "indebtedness" as defined in section 27(a)(4), Revenue Act of 1938 and I.R.C., and give rise to a dividends paid credit. 2. No dividends paid credit is allowable under section 27(a)(4) for payments on promissory notes given in a prior year in satisfaction of dividends. Spokane Dry Goods Co.,43 B.T.A. 793 (affd., 125 Fed.(2d) 865, followed.
1Opinion of the Court
*761OPINION.
Hill:
The Commissioner has determined income tax deficiencies of $1,678.78 and $958.52 for the calendar years 1938 and 1939, respectively. Several adjustments made by the Commissioner are not in question. The only issues presented by the petitioner are the disallowance of dividends paid credit under section 27 (a) (4), Revenue Act of 1938 and I. R. C.1
The facts were stipulated and are hereby adopted as our findings of fact. Only those facts necessary to an understanding of the issues will be set forth.
Petitioner is a corporation which filed its income tax returns for the taxable years…
2Cases cited6 opinions
- Bailey v. Baker Ice MacHine Co.Supreme Court of the United States · 1915
- Old Colony Trust Co. v. CommissionerSupreme Court of the United States · 1937
- Christie v. ScottSupreme Court of Kansas · 1908
- Freuhauf Trailer Co. v. State Corp. CommissionSupreme Court of Kansas · 1939
- International Harvester Co. v. Champlin Refining Co.Supreme Court of Kansas · 1941
1 more not listed; retrieve them via the Exa API.
3Cited by1 opinion
- Central Kansas Power Co. v. CommissionerUnited States Board of Tax Appeals · 1942