Commercial Inv. Trust Corp. v. Commissioner
United States Board of Tax Appeals
1. Expenses incurred in connection with the issuance of preferred stock which by its terms was to be retired at the rate of 3 percent per year, held not deductible either in the year paid, or ratably over the contemplated life of the stock. 2. In 1926 the petitioner gave certain employees the right to purchase shares of the common stock annually for three years at a price less than its fair market value, provided they continued as employees for prescribed periods.
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1. Expenses incurred in connection with the issuance of preferred stock which by its terms was to be retired at the rate of 3 percent per year, held not deductible either in the year paid, or ratably over the contemplated life of the stock. 2. In 1926 the petitioner gave certain employees the right to purchase shares of the common stock annually for three years at a price less than its fair market value, provided they continued as employees for prescribed periods. Held, the difference between the sale price of the stock and its fair market value at the time the right to purchase it was…
1Opinion of the Court
*148OPINION.
Arundell:
The decided cases are uniform in holding that costs incurred in corporate organization, sales of capital stock, and amendments to corporate charters are not ordinary and necessary business expenses deductible in the year paid or incurred. Emerson, Electric Mfg. Co., 3 B.T.A. 932; Simmons Co., 8 B.T.A. 631; affd., 33 Fed. (2d) 75; certiorari denied, 280 U.S. 577; William Cluff Co., 7 B.T.A. 662; Corning Glass Works, 9 B.T.A. 771; 37 Fed. (2d) 798; certiorari denied, 281 U.S. 742; Odorono Co., 26 B.T.A. 1355. Such items as are here sought to be deducted have consistently been…
2Cases cited7 opinions
- Emerson Electric Mfg. Co. v. CommissionerUnited States Board of Tax Appeals · 1926
- Simmons Co. v. CommissionerUnited States Board of Tax Appeals · 1927
- Borg & Beck Co. v. CommissionerUnited States Board of Tax Appeals · 1931
- United States Playing Card Co. v. CommissionerUnited States Board of Tax Appeals · 1929
- Haskell & Barker Car Co. v. CommissionerUnited States Board of Tax Appeals · 1928
2 more not listed; retrieve them via the Exa API.
3Cited by14 opinions
- Skenandoa Rayon Corp. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1941
- Skaggs Cos. v. CommissionerUnited States Tax Court · 1972
- Baltimore & O. R. Co. v. CommissionerUnited States Board of Tax Appeals · 1934
- Package Machinery Co. v. CommissionerUnited States Board of Tax Appeals · 1933
- Patent Button Co. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1953
9 more not listed; retrieve them via the Exa API.