Ragland Inv. Co. v. Commissioner
United States Tax Court
Petitioner-corporations received 6-percent cumulative preferred stock in partial consideration for assets transferred to the issuing corporation. Held, the payments made to petitioners with respect to this stock were dividends in reality as well as in form, and consequently, petitioners are entitled to the 85-percent dividends-received deduction under sec. 243, I.R.C. 1954.
1Opinion of the Court
OPINION
This case offers for our determination the familiar issue of whether ostensible dividend payments on preferred stock are, in reality, interest on indebtedness. We are, however, presented with a slightly different twist to the usual factual pattern in that the petitioners here are contending for an equity rather than a debt classification in order to qualify for the 85-percent dividends-received deduction prescribed in section 243(a) (l),3 I.R.C. 1954.4 Of course this twist in no way alters the applicable legal principles.
Accordingly, we note ab initio that the dividends received…
2Cases cited21 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- Gooding Amusement Co. v. CommissionerUnited States Tax Court · 1954
- Kraft Foods Company v. Commissioner of Internal Revenue, (Two Cases)Court of Appeals for the Second Circuit · 1956
- Commissioner of Int. Rev. v. Meridian & Thirteenth R. Co.Court of Appeals for the Seventh Circuit · 1942
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3Cited by1 opinion
- Ragland Inv. Co. v. CommissionerUnited States Tax Court · 1969