Shunk v. Commissioner of Internal Revenue

MILLER, Circuit Judge.

The petitioners seek separate reviews of three decisions of the Tax Court adjudging deficiencies in income tax for the calendar year 1940. The cases involve the same facts and are before us on a consolidated record. The question presented is whether property transferred by a trust estate, operating as a business, to a partnership formed by the beneficiaries of the trust estate, for an amount substantially less than its fair market, value, constituted a distribution to. the beneficiaries -of earnings or profits taxable as a dividend in the year of the transfer.

The facts…