Atlas Tack Co. v. Commissioner
United States Board of Tax Appeals
1. Dividend paid by petitioner during the taxable year held to have been paid from current earnings. 2. Where earnings of the current year to the date of payment of a dividend may not be accurately determined, the earnings of the entire year may be prorated. 3. Petitioner held not entitled to have its profits tax computed under the provisions of section 328, Revenue Act of 1918.
1Opinion of the Court
*4OPINION.
Phillips :
The net income of the petitioner, as determined by the Commissioner, was $541,320.92 for the year 1918. On April 24, 1918, it paid a dividend of $123,490. The Commissioner determined that a part of this dividend was paid from the surplus existing at the beginning of the year and therefore reduced invested capital. It appears, however, that the earnings of the company for the current year were sufficient to pay this dividend, if the earnings to the date of payment are to be measured by prorating the earnings of .the entire year upon the basis of the time elapsed between the…
2Cases cited2 opinions
- Edwards v. DouglasSupreme Court of the United States · 1925
- Mason v. RoutzahnSupreme Court of the United States · 1927
3Cited by1 opinion
- Atlas Tack Co. v. CommissionerUnited States Board of Tax Appeals · 1928