Dr. Pepper Bottling Co. v. Commissioner
United States Board of Tax Appeals
Taxpayer was required to set aside and apply two-thirds of its cash on hand over and above $7,500 on its indebtedness under the terms of a written contract executed by it prior to May 1, 1936, which prohibited the payment of any dividends until the indebtedness was paid in full. On July 31, 1937, during the taxable year, the indebtedness was paid in full out of 1937 earnings and profits.
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Taxpayer was required to set aside and apply two-thirds of its cash on hand over and above $7,500 on its indebtedness under the terms of a written contract executed by it prior to May 1, 1936, which prohibited the payment of any dividends until the indebtedness was paid in full. On July 31, 1937, during the taxable year, the indebtedness was paid in full out of 1937 earnings and profits. Held, taxpayer is not entitled to a credit under either section 26(c)(1) or section 26(c)(2) of the Revenue Act of 1936 in the amount of $29,924.38 paid on the indebtedness.
1Opinion of the Court
DR. PEPPER BOTTLING COMPANY OF MEMPHIS, INC., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Dr. Pepper Bottling Co. v. Commissioner
Docket No. 101626.
United States Board of Tax Appeals
45 B.T.A. 540; 1941 BTA LEXIS 1108;
October 31, 1941, Promulgated
Taxpayer was required to set aside and apply two-thirds of its cash on hand over and above $7,500 on its indebtedness under the terms of a written contract executed by it prior to May 1, 1936, which prohibited the payment of any dividends until the indebtedness was paid in full. On July 31, 1937, during the taxable year, the…
2Cases cited1 opinion
- Dr. Pepper Bottling Co. v. CommissionerUnited States Board of Tax Appeals · 1941