Court Opinion

ID: 4478740
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:16.06343+00
Date Added: 2024-06-11T15:04:10.422580
License: Public Domain

Murdock, J., dissenting: The interest in the amount of $4,640.52 should be allowed as a deduction for 1952. The amount was not deductible in 1951. However, it was not the purpose of section 24(c) to eliminate completely such an item as a deduction merely because it was not paid within 2% months after the close of the year in which it accrued. The intention was merely to delay the deduction until it was actually paid. Congress had noted that closely held corporations were accruing items as deductions whereas the stockholders to whom they were payable were not taking them into income because the stockholders were on a cash basis and had not actually received the payments. Congress enacted the quoted provisions of section 24(c) to make the deduction by the corporation depend upon payment to the stockholder, with consequent tax liability to the stockholder. It did not intend to deny the deduction permanently if the amount was actually paid. Section 24(c) modified section 23(b) to this extent. FoeRester, J., agrees with this dissent.