Old Mission of Portland Cement Co. v. Helvering, 293 U.S. 289 (1934)

Old Mission of Portland Cement Co. v. Helvering

No. 107

Argued November 13, 1934
Decided December 3, 1934
293 U.S. 289

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE NINTH CIRCUIT

Syllabus

1. In consolidated income tax returns made by two affiliated corporations under § 240 of the Revenue Acts of 1921, 1924, and 1926, and supplementary Treasury Regulations, there cannot be deductions of amortized discount on bonds which were issued by one of the affiliates and were purchased and are held by the other, since the anticipated payment of the face of the bonds at maturity, which alone gives occasion for amortizing the discount, is an inter-company transaction. P. 290.

2. A Treasury Regulation construing § 234(a)(1) of the Revenue Act of 1921 as permitting a corporation to deduct charitable donations from gross income as an "ordinary and necessary expense" when made to an institution conducted for the benefit of the donor’s employees or when it is a consideration for a benefit flowing directly to the corporation as an incident of its business, held to have the force of law in view of subsequent reenactments of the same statutory provision, the regulation continuing unchanged. P. 293.

3. The question whether, in the particular case, a contribution by a corporation to a Community Chest represented a consideration for a benefit flowing directly to the corporation as an incident of its business is a question of fact, as to which a ruling by the Commissioner disallowing deductions of such contributions from gross income is presumably correct. P. 294.

4. Review by this Court of determinations of the Board of Tax Appeals is limited to questions of law raised by its findings or its failure to make findings required by the statute. P. 294.

69 F.2d 676 affirmed.

Certiorari to review a judgment affirming an order of the Board of Tax Appeals, 25 B.T.A. 305, which sustained deficiency assessments of income taxes.