Rodney v. Commissioner of Internal Revenue

Second Circuit

Rodney v. Commissioner of Internal Revenue

145 F.2d 692, 33 A.F.T.R. (P-H) 115, 1944 U.S. App. LEXIS 2611

CourtCourt of Appeals for the Second Circuit

DecidedNovember 16, 1944

Docket36

StatusPublished

Cited by6 cases

This text of 145 F.2d 692 (Rodney v. Commissioner of Internal Revenue) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Rodney v. Commissioner of Internal Revenue, 145 F.2d 692, 33 A.F.T.R. (P-H) 115, 1944 U.S. App. LEXIS 2611 (2d Cir. 1944).

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Opinion

FRANK, Circuit Judge.

We think that the Tax Court cor- ' rectly held that the assumption by taxpayer on June 17, 1938, of the liabilities of Gladstone in exchange for Gladstone’s assets was a capital transaction in the nature of consideration for the receipt of the assets of Gladstone, and that interest paid in that year, which had accrued before such purchase, was not “interest” within the meaning of § 23(b). Nor do we think that the payment of $32,569.33 representing interest accrued prior to June 17, 1938, can be regarded as the declaration of a dividend by taxpayer to Mrs. Scott. It constituted the payment of a debt assumed by taxpayer which it was obligated to pay and was not a voluntary distribution by its board of directors.

Affirmed.

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FRANK, Circuit Judge.

We think that the Tax Court cor- ' rectly held that the assumption by taxpayer on June 17, 1938, of the liabilities of Gladstone in exchange for Gladstone’s assets was a capital transaction in the nature of consideration for the receipt of the assets of Gladstone, and that interest paid in that year, which had accrued before such purchase, was not “interest” within the meaning of § 23(b). Nor do we think that the payment of $32,569.33 representing interest accrued prior to June 17, 1938, can be regarded as the declaration of a dividend by taxpayer to Mrs. Scott. It constituted the payment of a debt assumed by taxpayer which it was obligated to pay and was not a voluntary distribution by its board of directors.

Affirmed.

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Bluebook (online)

145 F.2d 692, 33 A.F.T.R. (P-H) 115, 1944 U.S. App. LEXIS 2611, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rodney-v-commissioner-of-internal-revenue-ca2-1944.

Opinion

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