January 30, 1936
COMMISSIONER OF INTERNAL REVENUE
Petition for review from the United States Board of Tax Appeals.
Before BUFFINGTON, DAVIS, and THOMPSON, Circuit Judges.
BUFFINGTON, Circuit Judge.
In this tax case it appears that Leon S. Herbert, the complaining taxpayer, was the sole owner of the stock of a corporation and controlled its affairs. During the month of December, 1930, it declared a dividend payable on January 10, 1931. Instead of waiting until the latter date and getting his dividend at that time, Herbert had his corporation make an entry in its books before the closing of the year 1930, applying his dividend to his existing indebtedness to the company.
In view of such facts, the dividend was received and used by Herbert during 1930, and could not be received by him the following year. In other words, he elected to have it come to him as a dividend during the year 1930, the year of declaration, instead of having it come to him in 1931, the year of dividend payment. Clearly, the Commissioner was right in holding that this was not income accruing during 1931, but was income accruing in 1930. So holding, the judgment of the Commissioner is affirmed.
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