Court Opinion

ID: 9457547
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:24:51.715316+00
Date Added: 2024-06-11T17:35:23.587034
License: Public Domain

WINTER, Circuit Judge
(dissenting):
I dissent. As the district judge in his memorandum opinion correctly demonstrated, the distributions to exempt stockholders were ordinary and necessary expenses paid during the taxable year in carrying on the bank’s trade or business within the meaning of 26 U.S.*1159C.A. § 162(a). Accordingly, they should be deductible as ordinary and necessary business expenses.
Commissioner of Internal Revenue v. Lincoln Savings & Loan Asso., 403 U.S. 345, 91 S.Ct. 1893, 29 L.Ed.2d 519 (1971), and Swed Distributing Co. v. C. I. R., 323 F.2d 480 (5 Cir. 1963), are not to the contrary. By no stretch of the imagination can it be said that the distributions to the exempt stockholders constituted a benefit to the bank or an 'Additional capital asset — the basis of decision in Lincoln Savings. Nor is there in the instant case the identity of interest present in Swed Distributing Co. that would require the compulsory nature of the payment to be disregarded for federal tax purposes.
I would affirm the district court to the extent that it held the distributions deductible as ordinary and necessary business expenses.