Quite Imposing 4 Serial 143
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4. The so-called corpus of the company is the sum of the property that the company owns, the money that it owes, and the money that is due and owing. The corpus of a company may properly be taken into account in determining the basis on which depreciation is to be allowed. The corpus of a company is usually paid for in the form of its shares of stock and is reflected in the price of those shares. In the case of Liberty National Bank, the stock of the company was bought with funds that were deposited with the corporation. Such funds, therefore, belonged to the corporation, but the corporation is not entitled to depreciation. Its stock is carried on the books as a capital asset at cost. The funds which were put up for purchase by Liberty National Bank were not capital invested by that bank in the business, because Liberty National Bank was a shareholder of the corporation that owned the property. The bank was therefore entitled to depreciate the shares of stock that it held, at cost, but not the corporation. It is not true that depreciation of Liberty National Bank's shares of stock must necessarily be determined by the basis of the corporation. If the basis of the corporation is properly determined, then, indeed, Liberty National Bank must depreciate its shares of stock at cost, since that would be true of all property that Liberty National Bank owns.
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