Charles Rubens & Co. v. Commissioner
United States Board of Tax Appeals
1. Upon the organization of a corporation, it issued stock for the tangible property of a preceding business to its owner. The intangible property was expressly transferred separately.
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1. Upon the organization of a corporation, it issued stock for the tangible property of a preceding business to its owner. The intangible property was expressly transferred separately. Held, that the intangible property may not be included in invested capital and no apportionment may be made as in St. Louis Screw Co.,2 B.T.A. 649. 2. The distribution in prewar years of an amount to stockholders in proportion to stockholdings, although not expressly declared as a dividend, may upon proper evidence be treated as such rather than as an expense and will not reduce prewar income in determining…
1Opinion of the Court
*632OPINION.
SteRNhagen :
Reduced to its essentials, the petitioner’s first contention is that its original 1,750 shares of capital stock were issued for an aggregate of tangibles and intangibles and that by the application of the method approved in St. Louis Screw Co., 2 B. T. A. 649, it may properly compute its invested capital by including a portion of the good will of the preceding business as property paid in for stock or shares, thus leaving some part of the tangible property to be treated as paid-in surplus so as to increase the invested capital fro tanto. It contends that the contract and…
2Cited by1 opinion
- Charles Rubens & Co. v. CommissionerUnited States Board of Tax Appeals · 1927