Journal Publishing Co. v. Commissioner
United States Tax Court
Petitioner, a publishing company, entered into a written contract, agreeing to pay a competitor over a period of years, including the taxable year, the sum of $ 520,000, of which $ 50,000 was for certain assets and $ 470,000 was for the competitor's promise, within certain limits, to discontinue publication and not to resume publication of newspapers or otherwise compete.
Read the full summary
Petitioner, a publishing company, entered into a written contract, agreeing to pay a competitor over a period of years, including the taxable year, the sum of $ 520,000, of which $ 50,000 was for certain assets and $ 470,000 was for the competitor's promise, within certain limits, to discontinue publication and not to resume publication of newspapers or otherwise compete. During the taxable year the daily average outstanding liability of petitioner to such competitor was $ 483,770.49. Held, that such liability was not borrowed capital, within the meaning of section 719 of the Internal Revenue…
1Opinion of the Court
OPINION.
Disney, Judge:
May the petitioner in computing its excess profits tax liability, and therefore in the computation of its “borrowed invested capital,” consider as such its contractual liability to its competitor, to the extent of 50 percent thereof, under section 719 (a) of the Internal Revenue Code, as amended by section 201 of the Second Revenue Act of 1940 P The parties agree that the 50 percent was, in the taxable year, based upon $483,770.48. The amount so computed is eliminated by the deficiency notice, with the explanation that it was not evidenced by a bond, note, bill of…
2Cases cited6 opinions
- United States v. American Trucking AssociationsSupreme Court of the United States · 1940
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Koshland v. HelveringSupreme Court of the United States · 1936
- Lynch v. Alworth-Stephens Co.Supreme Court of the United States · 1925
- Helvering v. City Bank Farmers Trust Co.Supreme Court of the United States · 1935
1 more not listed; retrieve them via the Exa API.
3Cited by39 opinions
- Economy Sav. & Loan Co. v. CommissionerUnited States Tax Court · 1945
- West Constr. Co. v. CommissionerUnited States Tax Court · 1946
- Flint Nortown Theatre Co. v. CommissionerUnited States Tax Court · 1945
- Brewster Shirt Corp. v. CommissionerCourt of Appeals for the Second Circuit · 1947
- National Bank of Commerce v. CommissionerUnited States Tax Court · 1951
34 more not listed; retrieve them via the Exa API.