Chilhowee Mills v. Commissioner
United States Board of Tax Appeals
In 1937 the Chilhowee Mills, Inc., surrendered its charter. Its stockholders thereupon formed a partnership which, under the name Mills, same business that had been carried on by the corporation in the same premises.
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In 1937 the Chilhowee Mills, Inc., surrendered its charter. Its stockholders thereupon formed a partnership which, under the name Mills, same business that had been carried on by the corporation in the same premises. Held: :1) Income from business carried on by the partnership is taxable as partnership income. :2) The partnership is a proper party petitioner under the facts for purposes of questioning the correctness of respondent's determination that it was taxable as a corporation.
1Opinion of the Court
*688OPINION.
Keen :
At the time the corporate charter of CJiilhowee Mills, Inc., was surrendered it was agreed that the business of the corporation should be carried on by the stockholders as partners. New books of account were opened in the name of the partnership showing the interest of each stockholder to be that of a partner with an interest in the partnership equivalent to his former stock interest, and the business was carried on in the name of the partnership.
Upon the dissolution of a corporation the stockholders become the real owners of the corporate property, subject to the rights of…
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