F. J. Young Corp. v. Commissioner
United States Board of Tax Appeals
1. A gain to a corporation on the exchange of stock for stock, although not recognized under the provisions of section 112(b)(5) of the Revenue Act of 1928, increases earnings or profits available for dividends. Susan T. Freshman,33 B.T.A. 394, followed. 2. Book entries transferring surplus to no par common stock account in order to increase the stated value of such stock do not diminish the corporate earnings or profits available for dividends.
1Opinion of the Court
OPINION.
Arundell:
These proceedings, duly consolidated, involve deficiencies in income taxes for the year 1930 in the amount of $80,314.59 in Docket No. 74321, and $30,674.59 in Docket No. 74347.
The issue involved is whether a distribution in kind made by a corporation to the petitioners as stockholders thereof constituted a dividend within the meaning of section 115 (a) and (b) of the Revenue Act of 1928 or a distribution within the meaning of section 115 (d) of the same act.
The facts were stipulated and we state herein only such facts as are necessary to an understanding of the questions…
2Cases cited2 opinions
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Lynch v. HornbySupreme Court of the United States · 1918
3Cited by10 opinions
- Commissioner of Internal Revenue v. FJ Young Corp.Court of Appeals for the Third Circuit · 1939
- Commissioner of Internal Revenue v. Shenandoah Co.Court of Appeals for the Fifth Circuit · 1943
- Century Electric Co. v. CommissionerUnited States Tax Court · 1944
- Elmhirst v. CommissionerUnited States Board of Tax Appeals · 1940
- Estate of Fisher v. CommissionerUnited States Tax Court · 1944
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