Scruggs-Vandervoort-Barney, Inc. v. Commissioner
United States Tax Court
1. Petitioner's predecessor operated a retail department store whose assets and liabilities petitioner acquired through a statutory reorganization in 1937. Petitioner's predecessor owned 97.25 per cent of the stock of a bank which was located in the department store. Most, if not all, of the depositors were customers of petitioner's predecessor and later of petitioner.
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1. Petitioner's predecessor operated a retail department store whose assets and liabilities petitioner acquired through a statutory reorganization in 1937. Petitioner's predecessor owned 97.25 per cent of the stock of a bank which was located in the department store. Most, if not all, of the depositors were customers of petitioner's predecessor and later of petitioner. The bank was closed on January 14, 1933, and the depositors received 80.5 per cent of their deposits upon its liquidation. Upon the payment of the final dividend by the receiver of the bank, petitioner, in order to protect and…
1Opinion of the Court
OPINION.
Black, Judge'.
The issues presented in this proceeding are: (1) Whether or not the reimbursement to the depositors of the insolvent Scruggs, Vandervoort & Barney Bank under the circumstances detailed in our findings of fact represent ordinary and necessary business expenses within the meaning of section 23 of the Internal Revenue Code; (2) if the claimed deduction of $240,888.31 or any part thereof is not allowable, whether or not the petitioner overstated its taxable income for the year 1941 by reason of the fictitious gross profits resulting from redemption of the certificates; (3)…
2Cases cited4 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Dobson v. CommissionerSupreme Court of the United States · 1944
- UTAH POWER & LIGHT CO. v. PFOST, COMMISSIONER OF LAW ENFORCEMENT, Et Al.Supreme Court of the United States · 1932
- Pioneer Parachute Co. v. CommissionerUnited States Tax Court · 1944
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- Dinardo v. CommissionerUnited States Tax Court · 1954
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