United States v. El Pomar Investment Company

ORIE L. PHILLIPS, Circuit Judge.

This is an action to recover on a tax refund claim. It involves the question of whether deficits of predecessor corporations were carried over to successor corporations, which acquired the assets of their respective predecessors through tax-free reorganizations, with the result that earnings and profits of the last successor corporation realized after the last reorganization, but prior to 1951, retained by it until 1951, and in that year distributed to stockholders constituted a return of capital, rather than a dividend, taxable under § 115(a) of the Internal…