Valley Tractor & Equipment Co. v. Commissioner
United States Board of Tax Appeals
In December 1936 the board of directors of petitioner met and declared a dividend out of surplus. On or before December 31, 1936, petitioner delivered the dividend checks to its shareholders. On that date petitioner did not have sufficient cash on deposit to meet the face amount of the checks. Petitioner was solvent and made a practice of issuing checks in excess of its balance in the regular course of business, the bank honoring its overdrafts.
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In December 1936 the board of directors of petitioner met and declared a dividend out of surplus. On or before December 31, 1936, petitioner delivered the dividend checks to its shareholders. On that date petitioner did not have sufficient cash on deposit to meet the face amount of the checks. Petitioner was solvent and made a practice of issuing checks in excess of its balance in the regular course of business, the bank honoring its overdrafts. Held, petitioner is entitled to a credit against the undistributed profits surtax for dividends paid equal to the face amount of the checks.
1Opinion of the Court
VALLEY TRACTOR & EQUIPMENT CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Valley Tractor & Equipment Co. v. Commissioner
Docket No. 95878.
United States Board of Tax Appeals
42 B.T.A. 311; 1940 BTA LEXIS 1025;
June 28, 1940, Promulgated
In December 1936 the board of directors of petitioner met and declared a dividend out of surplus. On or before December 31, 1936, petitioner delivered the dividend checks to its shareholders. On that date petitioner did not have sufficient cash on deposit to meet the face amount of the checks. Petitioner was solvent and made a practice of issuing…
2Cases cited6 opinions
- Avery v. CommissionerSupreme Court of the United States · 1934
- Wilson v. CommissionerUnited States Board of Tax Appeals · 1929
- Foley Sec. Corp. v. CommissionerUnited States Board of Tax Appeals · 1938
- Scatena v. CommissionerUnited States Board of Tax Appeals · 1935
- Valley Tractor & Equipment Co. v. CommissionerUnited States Board of Tax Appeals · 1940
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