Brush-Moore Newspapers, Inc. v. Commissioner
United States Board of Tax Appeals
The taxpayer in 1931, being in financial difficulties and desiring to avoid annual principal payments of $50,000 on notes given by it in 1930 upon the purchase of certain shares of stock, exchanged $400,000 of such notes for 4,000 shares of its own second preferred stock, with the understanding that if dividends thereon were not paid in any quarter a fixed amount should be paid as interest, and, in addition, such amount as its directors deemed necessary for the support and…
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The taxpayer in 1931, being in financial difficulties and desiring to avoid annual principal payments of $50,000 on notes given by it in 1930 upon the purchase of certain shares of stock, exchanged $400,000 of such notes for 4,000 shares of its own second preferred stock, with the understanding that if dividends thereon were not paid in any quarter a fixed amount should be paid as interest, and, in addition, such amount as its directors deemed necessary for the support and maintenance of the payee of such notes or his wife, the payee being guaranteed by taxpayer against any loss resulting…
1Opinion of the Court
OPINION.
Mellott:
In these proceedings, duly consolidated, petitioner seeks a redetermination of (1) the deficiency in income tax determined against it by the Commissioner for the year 1933 in the amount of $7,203.67, and (2) the deficiency in income and excess profits taxes determined against it for the year 1934 in the amounts of $2,796.34 and $918.76.
One issue, common to both years, arises upon the Commissioner’s determination that certain payments made by the petitioner to the estate of Harry E. Taylor were “in the nature of advance dividends” upon second preferred stock of the corporation…
2Cited by7 opinions
- Bowersock Mills & Power Co. v. Commissioner of Int. Rev.Court of Appeals for the Tenth Circuit · 1949
- Benjamin Franklin Life Assurance Co. v. CommissionerUnited States Board of Tax Appeals · 1942
- Bowersock Mills & Power Co. v. CommissionerUnited States Tax Court · 1947
- Bowersock Mills & Power Co. v. Commissioner of Int. Rev.Court of Appeals for the Tenth Circuit · 1949
- Brush-Moore Newspapers, Inc. v. CommissionerUnited States Board of Tax Appeals · 1938
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