Phipps v. Commissioner
United States Tax Court
A parent corporation in a nontaxable reorganization liquidated five wholly owned subsidiaries, one of which had earnings and profits accumulated since March 1, 1913, in a comparatively small amount.
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A parent corporation in a nontaxable reorganization liquidated five wholly owned subsidiaries, one of which had earnings and profits accumulated since March 1, 1913, in a comparatively small amount. The other four had deficits in such earnings and profits in an aggregate amount much greater than the earnings and profits of the parent accumulated since March 1, 1913. Held, that a later distribution by the parent to its stockholders, including the petitioner, was, above the amount distributed from current earnings, distributed from capital. Commissioner v. Sansome, 60 Fed. (2d) 931; and Harter…
1Opinion of the Court
OPINION.
Disney, Judge:
The portion of the corporate distributions by the Nevada-California Electric Corporation in 1937 not paid from current earnings or profits was $411,896.98. The sole question here is whether that amount was paid from earnings or profits accumulated since, February 28,1913. The respondent contends, in short, that it was so paid, because Nevada Electric had at the beginning of 1937 earnings and profits accumulated since February 28, 1913, in the amount of $2,129,957.81; while, equally simply, the petitioner argues that the $2,129,957.81 was more than offset by the fact that…
2Cases cited2 opinions
- Senior Inv. Corp. v. CommissionerUnited States Tax Court · 1943
- Mandel v. CommissionerUnited States Tax Court · 1945
3Cited by5 opinions
- Commissioner v. PhippsSupreme Court of the United States · 1949
- Frelbro Corp. v. CommissionerUnited States Tax Court · 1961
- Stratton Grain Co. v. ReisimerDistrict Court, E.D. Wisconsin · 1958
- Frelbro Corp. v. CommissionerUnited States Tax Court · 1961
- Phipps v. CommissionerUnited States Tax Court · 1947