The opinion
CHASE, Circuit Judge
(dissenting in part).
I agree with the disposition of the first point providing for the apportionment of the expenses for legal services and the allowance of a deduction only for those which may be found necessary when the rule of National Outdoor Advertising Bureau, Inc., v. Helvering (C.C.A.) 89 F.(2d) 878 , is applied.
But I cannot agree to allow any deduction for the taxpayer’s contribution to the purchase of the shares of the corporation organized to carry out the added compensation plan, since I think this was shown to have been an investment rather than additional compensation to employees.
To the purchase of those shares the taxpayer contributed a part; the employees the remainder and they received not the shares but allotment certificates. The taxpayer acquired the legal title to the shares and was bound only to pay to the certificate holding employees, so long as they remained in its employ, an amount equal to the dividends received. If any employee relationship was severed for any reason there was to be an adjustment in respect to the shares concerned but that in no event was to be more than a payment of cash to the employee. The taxpayer promised to return the contribution of the employee and more, if the stock was then worth more, provided the termination of employment caused the taxpayer no loss.
Yet whatever may eventually be the amount the taxpayer will have to pay on account of any share it will still own that share and the payment will not exceed its book value. What any shares may cost the taxpayer is dependent upon future events too uncertain for present computation. Likewise, what may be realized by the taxpayer when, if ever, it finally disposes of the shares themselves cannot now be foretold. It has, as yet, merely given up the dividends on the shares for the benefit of its employees. That is, it has frozen its investment subject to a contract whose performance in the future is in terms to be governed by future happenings presently too uncertain to be given any effect for the purposes of taxation. When the taxpayer makes a final disposition of some, or all, of its shares, and only then, can the result be known and reflected in its then current computation of taxable income. That result may give it additional income or a deductible loss or neither. I would affirm the decision of the Board of Tax Appeals on this point.