Cooke v. Commissioner of Internal Revenue

PICKETT, Circuit Judge.

This is a proceeding to review a decision of the Tax Court which fixed deficiencies in petitioner’s (herein referred to as taxpayer or Cooke) income tax for the years 1941 and 1943, at $46,239.86 and $70,995.51 respectively. The appeal presents two primary issues: I, whether, within the meaning of the statute, 1 credits on the taxpayer’s books for the purpose of sharing 1941 business profits with key employees constituted “ordinary and necessary expenses, paid or incurred during the taxable year in carrying on any trade or business’’; and 2, whether the taxpayer had,…