Meridian & T. Realty Co. v. Commissioner
United States Board of Tax Appeals
1. DEDUCTIONS - INTEREST OR DIVIDENDS. - Six percent cumulative nonvoting, so-called preferred stock redeemable on fixed dates was not preferred stock but an indebtedness, and the amount paid thereon as "dividends", which was payable regardless of profits, was interest and deductible under section 23(b) of the Revenue Act of 1936. 2. CREDIT - CONTRACT RESTRICTING DIVIDENDS - SECTION 26(c)(1), REVENUE ACT OF 1936. - The petitioner could not have distributed any amount in the…
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1. DEDUCTIONS - INTEREST OR DIVIDENDS. - Six percent cumulative nonvoting, so-called preferred stock redeemable on fixed dates was not preferred stock but an indebtedness, and the amount paid thereon as "dividends", which was payable regardless of profits, was interest and deductible under section 23(b) of the Revenue Act of 1936. 2. CREDIT - CONTRACT RESTRICTING DIVIDENDS - SECTION 26(c)(1), REVENUE ACT OF 1936. - The petitioner could not have distributed any amount in the taxable year as dividends without violating the provisions of a written contract executed by the petitioner on November…
1Opinion of the Court
*866OPINION.
Murdock:
The Commissioner determined a deficiency of $2,910.06 in the income tax of the petitioner for the calendar year 1936. Two issues are presented for decision: (1) Whether the Commissioner erred in failing to allow a deduction of $1,800 for interest paid on so-called preferred stock, and (2) whether the petitioner is entitled to a credit under section 26 (c) (1) or (c) (2) equal to adjusted net income in determining undistributed net income. The parties have stipulated all of the facts which they deem material and the Board adopts the stipulation as its findings of fact. The…
2Cited by14 opinions
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- Hambuechen v. CommissionerUnited States Tax Court · 1964
- Inness v. CommissionerUnited States Tax Court · 1968
- Ragland Inv. Co. v. CommissionerUnited States Tax Court · 1969
- Ragland Investment Co. v. CommissionerUnited States Tax Court · 1969
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