Tsn Liquidating Corporation, Inc. v. United States

RANDALL, Circuit Judge:

This case presents the question whether assets distributed to a corporation by its subsidiary, immediately prior to the sale by such corporation of all the capital stock of such subsidiary, should be treated, for federal income tax purposes, as a dividend or, as the district court held, as part of the consideration received from the sale of such capital stock. We hold that on the facts of this case, the assets so distributed constituted a dividend and we reverse the judgment of the district court.

In 1969, TSN Liquidating Corporation, Inc. (“TSN”), which was then named…