Commissioner v. Pittsburgh Knife & Forge Co.

This is an appeal by the Commissioner of Internal Revenue from an order of the Board of Tax Appeals. As we view the ease, the question involved is, under the Revenue Act of 1917, 40 Stat. 300, can an assumed pro rata accrual of income and profit taxes for 1918 be deducted from current earnings in that year, in determining the amount of earnings available for payment of dividends, and thereby affect invested capital? That question the Tax Board answered in.the negative, holding:

“Petitioner’s invested capital for 1918 should not have been reduced on account of the tentative tax computed upon…