U.S. Court of Appeals for the Second Circuit, 1944

Rodney v. Commissioner of Internal Revenue

U.S. Court of Appeals for the Second Circuit · Decided November 16, 1944 · Swan, Hand, Frank

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

Counsel

LeBoeuf & Lamb, of New York City (Horace R. Lamb, and Leo A. Diamond, both of counsel), for petitioner., Samuel O. Clark, Jr., Sewall Key, and L. W. Post, all of Washington, D. C., for respondent.

Cases that cite this one

3 later published cases cite this decision.

Thompson v. Commissioner (United States Tax Court 1976)
Commissioner of Internal Revenue v. Philadelphia Transp. Co. (3d Cir. 1949)
M. Buten & Sons, Inc. v. Commissioner (United States Tax Court 1972)

This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.

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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