
    Appeal of Maurice J. Curran.
    Docket No. 793.
    Decided October 26, 1926.
    
      Beld, that no part of the dividends involved herein is taxable at the rates prescribed for the year 1917.
    
      Georgs E. Oleary, Esq., for the petitioner.
    
      Thomas P. Dudley, Jr., Esq., for the Commissioner.
    This appeal is from the determination of a deficiency in income tax for the year 1917 in the amount of $152,261.48.
    FINDINGS OP PACT.
    The taxpayer is an individual residing at Andover, Mass.
    On December 12,1916, the board of directors of the Gillette Safety Bazor Co. declared dividends on its common and preferred stock by the following resolutions:
    Voted to declare Quarterly dividend of 1-3/4% on the Common Stock of the Company, payable January 15, 1917, to stockholders of record at the close of business December 30, 1916.
    Voted to declare quarterly dividend of 1-3/4% on the Preferred Stock of the Company, payable January 15, 1917, to stockholders of record at the close of business December 30, 1916.
    The taxpayer was the owner of 22,730 shares of the common stock and 13,330 shares of the preferred stock of the Gillette Safety Bazor Co., and on January 15, 1917, he was paid, pursuant to the resolution of December 12, 1916, $39,777.50, as a dividend on his common stock and $23,275, as a dividend on his preferred stock.
    
      The Commissioner, upon audit of the taxpayer’s income-tax return for the year 1917, determined that $11,173.50 of the dividend on the common stock and all of the dividend on the preferred stock of the Gillette Safety Razor Co. received by taxpayer pursuant to the resolution of the board of directors passed on December 12, 1916, were distributed from profits or surplus accumulated during the year 1917 and were subject to the surtax rates prescribed by law for the year 1917. The Commissioner also made other additions to the taxpayer’s income, not material here, and determined that there is a deficiency in tax for the year 1917 in the amount of $152,261.48.
   OPINION.

Marquette :

The only issue herein is whether or not any part of the dividends declared by the directors of the Gillette Safety Razor Co. on December 12, 1916, and paid to the taxpayer on January 15, 1917, is taxable at the rates prescribed by law for the year 1917. In our opinion, the resolution of the board of directors passed on December 12, 1916, declaring the dividends in question, constituted a distribution to the stockholders at that time, regardless of the fact that payment was not made until the year 1917. Appeal of A. H. Stange, 1 B. T. A. 810. It follows that the distribution, having been made in the year 1916, could not have been from earnings for the year 1917, and that the Commissioner was in error in subjecting any part of the distribution to tax at the 1917 rates. Appeal of Harmon W. Hendricks, 4 B. T. A. 1257.

Order of redetermination will be entered on 15 days’ notice, under Rule 50.  