DocketNumber: Docket No. 9172
Citation Numbers: 12 B.T.A. 855
Judges: Littleton
Filed Date: 6/27/1928
Status: Precedential
Modified Date: 7/23/2022
The record of this action shows that the petitioner during 1919 had a paid-in capital of $35,000, and during the years 1920 and 1921 of $50,000; that during all of these years it had a surplus or undivided profits accounts of from $3,000 to $8,000. During
This record also establishes the fact that during the year 1920 the petitioner corporation received through the agency* of its president one-half of the net gain produced by a real estate transaction in which the president of the petitioner corporation had appeared as one of the buyers and sellers and that in this transaction he had borrowed.both the corporation’s credit and its money. He testified that it was his intention when he went into this transaction to give the corporation the benefit of the profit, if one was realized, and having realized a profit from the sale of the property that profit was turned in to the corporation which retained it and treated it as a part of its sux-plus distributable to its stockholders as dividends. Under these circumstances, we are convinced that the corporation may not now properly claim that it did not receive income from such transaction and that such income was properly included in its gross income for the year 1920.
Respecting the losses claimed as a result of the company’s inability to collect the total amount of certain insurance premiums, the situation presented by the record is in brief, that during the late months of 1919 and the early months of 1920 the petitioner accepted from two general contractors applications for casualty and surety bonds, premiums upon which amounted to $17,031.94. The gross amount of these premiums was entered on the petitioner’s books in the ordinary course of business as accounts receivable. Such accounts receivable were due and payable in cash within 30 or 45 days, but were not so paid. The two contractors were unable to pay cash and petitioner accepted their notes in 1920 and substituted the notes receivable for the accounts receivable in petitioner’s books. Petitioner could not cancel the surety bonds and had to remit the premiums due the companies it represented. Due to the financial condition of the two contractors during 1920, petitioner had reason to doubt the collectibility of the notes in full, but hoped to collect when the contract work was completed and paid for. During the
Judgment will be entered for the respondent.