French v. Commissioner
United States Tax Court
In 1948 petitioners borrowed money from a corporation to purchase the stock of the majority stockholder and at that time they executed their non-interest-bearing notes to the corporation in the amount of the loans. In 1950 petitioners surrendered a proportional part of their stock to the corporation which then canceled their outstanding notes.
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In 1948 petitioners borrowed money from a corporation to purchase the stock of the majority stockholder and at that time they executed their non-interest-bearing notes to the corporation in the amount of the loans. In 1950 petitioners surrendered a proportional part of their stock to the corporation which then canceled their outstanding notes. Held, this redemption and cancellation of stock was at such time and in such manner as to be essentially equivalent to a taxable dividend within the meaning of section 115 (g), 1939 Code.
1Opinion of the Court
OPINION.
Johnson, Judge:
The respondent has determined that the cancellation of petitioners’ notes to Cooper-Smith and the concurrent retirement by the corporation of a part of petitioners’ stock occurred at such time and in such manner as to be essentially the equivalent of a taxable dividend within the meaning of section 115 (g) of the Internal Revenue Code of 1939, and in support of his determination relies principally upon Wall v. United States, (C. A. 4,1947) 164 F. 2d 462; Lowenthal v. Commissioner, (C. A. 7, 1948) 169 F. 2d 694, affirming a Memorandum Opinion of this Court, and Woodworth…
2Cases cited9 opinions
- Minnesota Tea Co. v. HelveringSupreme Court of the United States · 1938
- Wall v. United StatesCourt of Appeals for the Fourth Circuit · 1947
- Zenz v. QuinlivanCourt of Appeals for the Sixth Circuit · 1954
- Anna I. Woodworth v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1955
- Woodruff v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1942
4 more not listed; retrieve them via the Exa API.
3Cited by13 opinions
- Edgar S. Idol, Katherine G. Idol, and Speedway Transports, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1963
- Television Industries, Inc. v. CommissionerUnited States Tax Court · 1959
- Kobacker v. CommissionerUnited States Tax Court · 1962
- Idol v. CommissionerUnited States Tax Court · 1962
- Holsey v. CommissionerUnited States Tax Court · 1957
8 more not listed; retrieve them via the Exa API.