Godley v. Commissioner
United States Tax Court
A corporation having total earnings or profits available for dividends of $ 5,674,586.32 distributed to its shareholders cash in the amount of $ 2,113,722.03 with stock having a cost basis of $ 3,199,950 and a fair market value on the date of the distribution of $ 8,983,407.75. Held, the distributions were taxable as dividends only to the extent of earnings and profits available for dividends, section 115 (a) of the Code, and the appreciation in value of the property…
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A corporation having total earnings or profits available for dividends of $ 5,674,586.32 distributed to its shareholders cash in the amount of $ 2,113,722.03 with stock having a cost basis of $ 3,199,950 and a fair market value on the date of the distribution of $ 8,983,407.75. Held, the distributions were taxable as dividends only to the extent of earnings and profits available for dividends, section 115 (a) of the Code, and the appreciation in value of the property distributed does not serve to increase the corporation's "earnings or profits." Held, further, to the extent that the fair…
1Opinion of the Court
OPINION.
Hill, Judge:
Although the first issue here presented by the parties had its birth in questions presented in previous litigation before this Court, it comes before us here in a new and unique form. The problem is this. Should the distributing corporation’s statutory earnings or profits be reduced, because of a dividend in kind of property which has appreciated in value over cost or adjusted basis, by the fair market value of the property at the time of distribution or by the cost or j adjusted basis of the property distributed?
The genesis of the problem before us was the holding in…
2Cases cited12 opinions
- United States v. Kirby Lumber CoSupreme Court of the United States · 1931
- General Utilities & Operating Co. v. HelveringSupreme Court of the United States · 1935
- Commissioner of Int. Rev. v. Transport Trad. & Term. Corp.Court of Appeals for the Second Circuit · 1949
- Commissioner of Internal Revenue v. First State BankCourt of Appeals for the Fifth Circuit · 1948
- R. D. Merrill Co. v. CommissionerUnited States Tax Court · 1945
7 more not listed; retrieve them via the Exa API.
3Cited by19 opinions
- Gross v. CommissionerUnited States Tax Court · 1955
- Commissioner of Internal Revenue v. Hirshon TrustCourt of Appeals for the Second Circuit · 1954
- Anderson v. CommissionerUnited States Tax Court · 1976
- Commissioner of Internal Revenue v. Godley's EstateCourt of Appeals for the Third Circuit · 1954
- H. H. Robertson Co. v. CommissionerUnited States Tax Court · 1972
14 more not listed; retrieve them via the Exa API.