Lindsey-Long Coal & Lumber Co. v. Commissioner

5 B.T.A. 243, 1926 BTA LEXIS 2897

Opinion

OPINION.

Smith :

The amounts of compensation claimed as deductions from gross income in the petitioner’s tax returns for 1920, 1921, and 1922, were payments of salaries to officers rendering services to' the company during thosé years. They were not, in our opinion, unreasonable deductions.

During the year 1920, Lindsey and Long each owned approximately one-third of the capital stock of the corporation. During the year 1921 they acquired Whiteside’s stock, and at the close of the year they owned all of the stock of the corporation, but in what proportion is not in evidence. We can not make any finding that the amounts paid were in effect distributions of profits. In the light of the record, we can not do otherwise than to find that the salaries paid to officers were ordinary and necessary expenses of doing business, and as such were deductible from gross income.

Judgment will be entered on 15 days’ notice, under Rule 50.

Trammell dissents.