Parkersburg Iron & Steel Co. v. Commissioner
United States Board of Tax Appeals
1. Liberty bonds, purchased at par, were used at that value in payment of dividends, the market price then being less than par.
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1. Liberty bonds, purchased at par, were used at that value in payment of dividends, the market price then being less than par. Held, no loss sustained. 2. Factory alterations suggested by Government authorities supervising war work which did not increase the efficiency of the factory, and which have been continued in use, held to constitute capital expenditures. 3. Cost of removal of an engine from one part of a factory to another, held deduct ble as an ordinary and necessary expense. 4. Cost of machinery and equipment purchased and used solely for war work, which was scrapped immediately…
1Opinion of the Court
*78OPINION.
Marquette:
Petitioner complains of the respondent’s action in disallowing as a deduction for 1918 an alleged loss of $2,708, representing the difference between the cost to petitioner of the Second and Third Liberty Loan bonds distributed to stockholders in payment of the February 25 and July 22 dividends, and the estimated fair market value thereof at the dates of distribution. The dividend of February 25, at the rate of 12½ per cent, and that of July 22, at the rate of 7 per cent, amounted to $50,000 and $28,000, respectively. Following the dividend declarations of February 25, and…
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