
    Dome Mines, Ltd., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 26684.
    Promulgated July 29, 1930.
    
      Ferdinand Tannenbaum, Esq., for the petitioner.
    
      Bruce A. Low, Esq., for the respondent.
   OPINION.

Phillips :

The statute allows as a deduction in computing taxable income “ all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” Petitioner’s position is that the amount paid to list its capital stock upon the stock exchange is deductible. Petitioner points out that as its stock had already been issued, the expenditure can not be regarded as a part of its organization expenses. It is also contended that no benefit flows to petitioner from the listing; that any benefit accrued to the stockholders in that it afforded them a broader market for their securities. For these reasons it is said that the amount paid to secure the listing of the stock can not be treated as a capital expenditure.

If the expenditure does not meet the statutory requirement, it can not be deducted, even though it may not properly be classified as a “ capital expenditure.” It is clear that there are expenditures which are not of a capital nature and yet do not meet the test of the statute.

Assuming, as does counsel for the petitioner, that the petitioner was not benefited by this expenditure and that the listing was for the benefit of the stockholders, it seems impossible to say that the payment was an ordinary and necessary, expense of carrying on the business of the petitioner, which business is stated in the application for listing to be gold mining and milling. Money expended for the sole benefit of the stockholders and from which the corporation derives no benefit is analagous to a dividend.

If counsel is incorrect in his assumption, stated above, and the listing of its stock was made for the benefit of petitioner, it seems clear that the rights and benefits thereby acquired continued indefinitely and that their cost can not be deducted as an expense of the year in which payment was made.

Decision will Toe. entered, for respondent.  