Fuhlage v. Commissioner
United States Board of Tax Appeals
1. In 1920 a corporation capitalized earned surplus and issued additional common stock. This was necessary in order to care for increased business and in order to provide for the contemplated entry into another phase of the same business. Thereafter, the business did not improve to the extent anticipated and the matter of business expansion was definitely abandoned in 1929. It was then determined that the company did not need all its capital for successful operation.
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1. In 1920 a corporation capitalized earned surplus and issued additional common stock. This was necessary in order to care for increased business and in order to provide for the contemplated entry into another phase of the same business. Thereafter, the business did not improve to the extent anticipated and the matter of business expansion was definitely abandoned in 1929. It was then determined that the company did not need all its capital for successful operation. The capitalization was reduced by the redemption of a portion of the capital stock. From 1923 to 1929 the corporation declared…
1Opinion of the Court
*226OPINION.
McMahon:
The Beacon Paper Co. in 1929 redeemed and canceled $200,000 par value of its capital stock, paying cash therefor. The petitioner surrendered to the company 1,213% shares of stock, receiving from the company in payment therefor $121,333.33. This wag stock which the petitioner had purchased from Louis Alt in *2271927 at a cost of $101.59 per share or $128,252.53. The respondent held that the payment of the amount of $121,333.33 to the petitioner in 1929 was the equivalent of a taxable dividend under section 115 (g) of the Revenue Act of 1928. The petitioner contends that the…
2Cases cited4 opinions
- Helvering v. TaylorSupreme Court of the United States · 1935
- Brewster v. GageSupreme Court of the United States · 1930
- Maryland Casualty Co. v. United StatesSupreme Court of the United States · 1920
- Helvering v. BlissSupreme Court of the United States · 1934
3Cited by13 opinions
- Hirsch v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1941
- Fuhlage v. CommissionerUnited States Board of Tax Appeals · 1935
- Hunt v. CommissionerUnited States Board of Tax Appeals · 1937
- Kallick v. CommissionerUnited States Board of Tax Appeals · 1941
- Kelly v. CommissionerUnited States Board of Tax Appeals · 1937
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