American Business Credit Corp. v. Commissioner
United States Tax Court
Commissions paid by petitioner corporation to its broker agent as compensation for its services in selling petitioner's stock are not to be deducted from the price received for the stock in computing equity invested capital under section 718 (a) (1), Internal Revenue Code.
1Opinion of the Court
OPINION.
Van Fossan, Judge:
The question at issue can be stated simply. For equity invested capital purposes and under section 718 (a) (1) of the Internal Revenue Code,1 is the amount paid in by stockholders for their stock the criterion, or is it the net amount of cash made available to' the corporation after redeeming its commitment to pay its broker agent certain commissions for making the sale of such stock?
We have examined the history of the origin and use of the term “invested capital” and find that throughout the consideration of invested capital as a measure of allowing credit against…
2Cases cited3 opinions
- LaBelle Iron Works v. United StatesSupreme Court of the United States · 1921
- Helvering v. Union Pacific RailroadSupreme Court of the United States · 1934
- Palomar Laundry v. CommissionerUnited States Tax Court · 1946
3Cited by15 opinions
- Cleveland Graphite Bronze Co. v. CommissionerUnited States Tax Court · 1948
- Warner Co. v. CommissionerUnited States Tax Court · 1948
- Gabriel Co. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1951
- Cleveland Graphite Bronze Co. v. Comm'rUnited States Tax Court · 1948
- Gabriel Co. v. CommissionerUnited States Tax Court · 1949
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