Summary
In General Alloy, both principal and interest of the note in question were subordinated, and the corporation which received the funds began corporate life with $50,000. of equity and $450,000. of debt.
Summary of this case from Trans-Atlantic Company v. C. I. ROpinion
No. 15165.
Argued May 20, 1965.
Decided June 7, 1965.
On Petition for Review of the Decision of the Tax Court of the United States.
William W. Scott, Jr., Thorp, Reed Armstrong, Pittsburgh, Pa. (John E. Laughlin, Jr., Pittsburgh, Pa., on the brief), for petitioner.
Morton K. Rothschild, Dept. of Justice,
Tax Division, Washington, D.C. (Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, Harry Baum, Attys. Dept. of Justice, Washington, D.C., on the brief), for respondent.
Before BIGGS, Chief Judge, and STALEY and GANEY, Circuit Judges.
The record in this case warrants the Tax Court's determination that the contributions made to the taxpayer by its two principal stockholders were contributions to equity capital rather than true indebtedness. Since we perceive no error in the proceedings, the decision of the Tax Court will be affirmed.