Union Tel. Co. v. Commissioner
United States Board of Tax Appeals
Petitioner's common stock was owned by X corporation. The latter's common stock was owned by Y corporation, which also, together with an individual and Z corporation, owned all of X's preferred stock. Y, Z, and the Individual, as owners of X's pre ferred stock, entered into a contract which provided, among other things, that no dividend should be declared by X or any of its subsidiaries until their indebtedness should be paid.
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Petitioner's common stock was owned by X corporation. The latter's common stock was owned by Y corporation, which also, together with an individual and Z corporation, owned all of X's preferred stock. Y, Z, and the Individual, as owners of X's pre ferred stock, entered into a contract which provided, among other things, that no dividend should be declared by X or any of its subsidiaries until their indebtedness should be paid. By custom Y acted in contractual matters for petitioner, which acquiesced in such action. Held, that the contract was not executed by petitioner within the meaning of…
1Opinion of the Court
*612OPINION.
Kern :
To be eligible for a credit created for the benefit of taxpayers, strict'compliance with the terms of the section granting the credit must be shown. New Colonial lee Co. v. Helvering, 292 U. S. 435; Helvering v. Northwest Steel Rolling Mills, Inc., 311 U. S. 46; Boeckler Lumber Co., 43 B. T. A. 804.
In the instant proceeding petitioner claims the benefit of section 26 (c) (1) and (2) of the Revenue Act of 1936. Both subsections (1) and (2) have several essential requirements in common— i. e., there must exist a written contract executed by the corporation prior to May 1, 1936, a…
2Cases cited3 opinions
- New Colonial Ice Co. v. HelveringSupreme Court of the United States · 1934
- Helvering v. Northwest Steel Rolling Mills, Inc.Supreme Court of the United States · 1940
- American Preservers' Co. v. NorrisU.S. Circuit Court for the District of Eastern Missouri · 1890
3Cited by1 opinion
- Union Tel. Co. v. CommissionerUnited States Board of Tax Appeals · 1941