Legal Opinion

Horrmann v. Commissioner

United States Board of Tax Appeals

Decided October 21, 1936No. Docket Nos. 77141, 77142, 77143, 77144, 77145, 77200Published

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

AUGUST HORRMANN, PETITIONER, ET AL., 1v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Horrmann v. Commissioner

Docket Nos. 77141, 77142, 77143, 77144, 77145, 77200.

United States Board of Tax Appeals

34 B.T.A. 1178; 1936 BTA LEXIS 587;

October 21, 1936, Promulgated

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…

2Cases cited24 opinions

  1. Eisner v. MacOmberSupreme Court of the United States · 1920
  2. Towne v. EisnerSupreme Court of the United States · 1918
  3. LaBelle Iron Works v. United StatesSupreme Court of the United States · 1921
  4. Lynch v. HornbySupreme Court of the United States · 1918
  5. Gibbons v. MahonSupreme Court of the United States · 1890

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