Wanamaker Trustees v. Commissioner
United States Tax Court
1. Wholly owned subsidiary's purchase of parent corporation's stock from petitioners, who were practically the sole owners of parent, held not to result in a distribution to petitioners substantially equivalent to a taxable dividend under Internal Revenue Code, section 115 (g), since the subsidiary corporation did not cancel or redeem "its stock." Mead Corporation v. Commissioner (C. C. A., 3d Cir.), 116 Fed.
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1. Wholly owned subsidiary's purchase of parent corporation's stock from petitioners, who were practically the sole owners of parent, held not to result in a distribution to petitioners substantially equivalent to a taxable dividend under Internal Revenue Code, section 115 (g), since the subsidiary corporation did not cancel or redeem "its stock." Mead Corporation v. Commissioner (C. C. A., 3d Cir.), 116 Fed. (2d) 187, followed. 2. Income applied by petitioners, trustees of Pennsylvania testamentary trust, pursuant to agreement with beneficiaries, to the payment of state inheritance taxes…
1Opinion of the Court
OPINION.
Oppek, Judge:
The first issue turns on whether section 115 (g) fits the transaction here involved. The provision is:(g) Redemption of Stock. — If a corporation cancels or redeems its stock (whether or notrsuch stock was issued as a stock dividend) at such time and in such manner as to make the distribution and cancellation or redemption in whole or in part essentially equivalent to the distribution of a taxable dividend, the amount so distributed in redemption or cancellation of the stock, to the extent that it represents a distribution of earnings or profits accumulated after February…
2Cases cited5 opinions
- United States v. MitchellSupreme Court of the United States · 1926
- Keith v. JohnsonSupreme Court of the United States · 1926
- Constable's EstateSupreme Court of Pennsylvania · 1930
- Crane's EstateSupreme Court of Pennsylvania · 1933
- Henris's EstateSuperior Court of Pennsylvania · 1913
3Cited by1 opinion
- Wanamaker Trustees v. CommissionerUnited States Tax Court · 1948