Corbett & Stuart v. Commissioner

Decided April 12, 1928

United States Board of Tax Appeals · decided 1928-04-12

The invested capital of a corporation may not be reduced in determining the extent to which a dividend is paid from current earnings of a year by a tentative tax theoretically set aside out of such earnings pro rata over such year, because the income and profits tax does not become due and payable and, therefore, does not accrue until the following year.

Relies on L. S. Ayers & Co. v. Commissioner · All America Cables v. Commissioner

Decided 1928-04-12

¶1 *541OPINION.

Smith

¶2: The question presented by this proceeding has been before the Board in L. S. Ayers & Co., 1 B. T. A. 1135, wherein we held that the invested capital of a corporation might not be reduced in determining the extent to which a dividend is paid from current earnings of a year by a “ tentative tax ” theoretically set aside out of such earnings pro rata over such year. The position there taken was reaffirmed in All America Cables, Inc., 10 B. T. A. 213. These decisions are controlling in this case.

¶3Judgment will be entered on 15 days’ notice, wider Rule 50.