v2280-393
vs. Comm'r of Internal Bev&tme 11
new corporation shall acquire the same at execu-
tion sale in actions to be brought, if necessary,
against the Pacific Tungsten Company, and out
of any other moneys which the said new cor-
poration may have available for that purpose
it will first pay, etc."
It is held that the agreement is not considered to
be a contract which prohibits payment of dividends
as contemplated by section 26(c)(1) of the Revenue
Act of 1936. It is further held that no credit may
be computed under section 26(c)(2) of said Act,
since the agreement does not expressly deal with
the disposition of earnings and profits of the cur-
rent 3ear. Moreover, the agreement provides that
the debt may be paid from any other fmid available
which might consist of borrowed money or receipts
from sale of capital assets.
COMPUTATION OB^ TAX
Year: 1936
Excess-profits Tax :
Taxable net income $129,207.31
TiCss :
10^ of $2,500,000.00 value of capital stock as
declared in your capital stock tax return for
year ended June 30, 1936 250,000.00
Net income subject to excess-profits tax None
10
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