Commissioner v. Grant Trading Co.

FRANK, Circuit Judge.

In the computation of undistributed personal holding company net income which is subject to surtax under the Revenue Act of 1938, a credit is allowed under § 405(b), 26 U.S.C.A. Int.Rev.Code, § 504(b), for “amounts used * * * to retire indebtedness * * * incurred prior to January 1, 1934 if such amounts are reasonable with reference to the size and terms of such indebtedness.” Article 405-2 of Treasury Regulation 101 provides that indebtedness evidenced by notes or similar obligations must ordinarily be deemed to have been incurred on the date of the issuance of the…