Pitkin v. Commissioner
United States Board of Tax Appeals
A banking corporation, for the purpose of meeting the requirements of a local statute in regard to intercorporate holding of stocks, increased its capital stock and sold the additional shares to its stockholders at $150,000 above par; it thereupon declared and paid a dividend of $200,000 to a committee of the stockholders who used the amount to purchase stock of another corporation. The several steps were in accordance with a prearranged plan.
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A banking corporation, for the purpose of meeting the requirements of a local statute in regard to intercorporate holding of stocks, increased its capital stock and sold the additional shares to its stockholders at $150,000 above par; it thereupon declared and paid a dividend of $200,000 to a committee of the stockholders who used the amount to purchase stock of another corporation. The several steps were in accordance with a prearranged plan. Held that the $150,000 of the so-called dividend was merely a repayment of an amount advanced by the stockholders as a loan for a particular purpose…
1Opinion of the Court
OPINION.
ARtjndell:
This controversy relates to income taxes for the year 1929 in the amount of $3,989.05. The only issue involved,is whether or not the petitioner received a taxable dividend of $37,785.54 from the City National Bank & Trust Co., a corporation, in 1929.
The main facts are stipulated, but some oral testimony was introduced at the hearing showing the following situation: The petitioner, a resident "and citizen of the State of New Jersey, was, prior to March 4, 1928, one of a group owning 82.1 percent of the .stock of the City National Bank & Trust Co., a New Jersey corporation,…
2Cases cited2 opinions
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Edwards v. DouglasSupreme Court of the United States · 1925
3Cited by3 opinions
- Charles H. Martin v. CommissionerUnited States Tax Court · 1954
- Corrigan v. CommissionerUnited States Tax Court · 1944
- Pitkin v. CommissionerUnited States Board of Tax Appeals · 1934