Fidelity Savings & Loan Ass'n v. Burnet

GRONER, Associate Justice.

Appellant is a building and loan associa-, tion organized under the laws of California. In its income tax returns it deducted as a part of its expenses sums paid to its stockholders semiannually for the years 1931 to 1926, inclusive. The Board decided against the claim, and the question we have to decide is whether amounts paid by appellant to the holders of its “passbook stock” and/or. its “fall-paid capital stock” were nondednetible dividend distributions or were interest payments.

Tbe applicable statute is section 234 (a) of the Revenue Act of 1921, 42 Stat. 227.…