De Coppet v. Commissioner
United States Board of Tax Appeals
1. The shareholders of a bank were entitled to share, through a trust, in dividends and cash distributions of an investment corporation which the bank had organized to engage in activities forbidden to it. The investment corporation's shares, always kept equal in number to outstanding bank shares, were owned by trustees, required to be bank directors or officers, and the corporation's activities were controlled by the bank's directors.
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1. The shareholders of a bank were entitled to share, through a trust, in dividends and cash distributions of an investment corporation which the bank had organized to engage in activities forbidden to it. The investment corporation's shares, always kept equal in number to outstanding bank shares, were owned by trustees, required to be bank directors or officers, and the corporation's activities were controlled by the bank's directors. The shareholders' rights under the trust were inseparable from their ownership of bank shares, and were evidenced only by an endorsement on their bank share…
1Opinion of the Court
*1392OPINION.
SteRnhagan :
The petitioners demand a deduction in 1933 for loss because of the worthlessness of the shares of the Continental Corporation of New York, the “investment corporation.” The Commissioner disallowed the deduction for the reason that “* * * no part of the cost of the [bank] stock can be allocated to the [investment corporation] stock.”
The shares of the investment corporation were owned by the trustees, and the petitioners’ interest in them was that of beneficiaries of the trust, a position which was always incidental to their ownership of shares in the bank. Notwithstanding…
2Cited by2 opinions
- Wise v. CommissionerCourt of Appeals for the Third Circuit · 1940
- De Coppet v. CommissionerUnited States Board of Tax Appeals · 1938