Kirschenbaum v. Commissioner of Internal Revenue

L. HAND, Circuit Judge.

The petitioners appeal from orders of the,. Tax Court which assessed deficiencies in income tax against them for the year 1941. The quer^n is whether shares of stock held by then, 'nd transferred to the corporation, were thereby “cancelled or redeemed,” and whether payments, made in exchange out of the corporation’s accumulated earnings, were distributions “essentially equivalent to the distribution of the taxable dividends,” under § 115(g) of the Internal Revenue Act of 1938, 26 U.S.C.A. Int.Rev.Code, § 115(g). The taxpayers, together with one Berkman, were engaged in…