Horrmann v. Commissioner
United States Board of Tax Appeals
1. STOCK DIVIDEND - EFFECT ON EARNINGS OR PROFITS. - A stock dividend that is not taxable to the shareholder does not diminish earnings or profits available for subsequent distribution. 2. REDEMPTION OF STOCK. - Redemption in 1927 of preferred stock issued as a dividend in 1922, held, not shown to be essentially equivalent to the distribution of a taxable dividend. 3. Id. - Redemption of preferred stock at par, which was a partial liquidation, held, properly chargeable in…
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1. STOCK DIVIDEND - EFFECT ON EARNINGS OR PROFITS. - A stock dividend that is not taxable to the shareholder does not diminish earnings or profits available for subsequent distribution. 2. REDEMPTION OF STOCK. - Redemption in 1927 of preferred stock issued as a dividend in 1922, held, not shown to be essentially equivalent to the distribution of a taxable dividend. 3. Id. - Redemption of preferred stock at par, which was a partial liquidation, held, properly chargeable in part to capital account, the part so chargeable being represented by the ratio of the paid-in capital to the total capital…
1Opinion of the Court
*1181OPINION.
Arundell:
The respondent has treated the $240,000 cash distribution by the brewing company in 1930 as a distribution out of the corporate earnings or profits accumulated after February 28, 1913, hence, taxable as a dividend under section 115 of the Revenue Act of 1928.1 The petitioners claim that the post-1913 earnings were exhausted before the 1930 distribution. Consequently, that distribution was from earnings prior to March 1, 1913, and was not taxable.
Between February 28, 1913, and the time of the increase in capitalization in 1922 the company accumulated earnings in the amount of…
2Cases cited7 opinions
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Towne v. EisnerSupreme Court of the United States · 1918
- LaBelle Iron Works v. United StatesSupreme Court of the United States · 1921
- Lynch v. HornbySupreme Court of the United States · 1918
- Gibbons v. MahonSupreme Court of the United States · 1890
2 more not listed; retrieve them via the Exa API.
3Cited by19 opinions
- Enoch v. CommissionerUnited States Tax Court · 1972
- Anderson v. CommissionerUnited States Tax Court · 1976
- Helvering v. JarvisCourt of Appeals for the Fourth Circuit · 1941
- Divine v. CommissionerUnited States Tax Court · 1972
- Webb v. CommissionerUnited States Tax Court · 1977
14 more not listed; retrieve them via the Exa API.