Deputy, Administratrix v. Du Pont

This case presents the question of whether respondent in computing his taxable net income for the year 1931 may deduct payments of $647,711.56 made by him in that year to the Delaware -Realty and Investment Co. (hereinafter called the Delaware Company). The deduction is sought either under § 23 (a) of the Revenue Act of 1928 (45 Stat. 791) as “ordinary and necessary expenses paid *490or incurred during the taxable year in carrying on” the “trade or business” of respondent; or under § 23 (b)as “interest paid or accrued within the taxable year on indebtedness.” The Commissioner disallowed the…