Kraus Trust v. Commissioner
United States Tax Court
A corporation in which petitioners owned 50 percent of the 3,000 shares of outstanding stock made distributions in 1940 of $ 50 per share on stock having $ 50 par value. The business of the corporation was making school slates. For several years surplus funds not needed in the business were invested in securities. In 1940 the securities were sold and the proceeds distributed to the stockholders.
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A corporation in which petitioners owned 50 percent of the 3,000 shares of outstanding stock made distributions in 1940 of $ 50 per share on stock having $ 50 par value. The business of the corporation was making school slates. For several years surplus funds not needed in the business were invested in securities. In 1940 the securities were sold and the proceeds distributed to the stockholders. The distribution did not serve any business need of the corporation but was made for the benefit of trusts owning stock. No plan of liquidation of the corporation had been adopted. The corporation was…
1Opinion of the Court
OPINION.
Habron, Judge:
The question presented by the pleadings is whether the Slate Co.’s distributions of $150,000 in 1940 were distributions in partial liquidation within section 115 (c) of the Internal Revenue Code, as petitioners contend. Petitioners’ argument that the distributions in question were made in partial liquidation of the company, as defined in section 115 (i), is founded upon their contention that the cancellation of 1,500 shares of stock in 1942 was related to the distributions of $75,000 each in 1940; or, in another manner of statement, that those two distributions were made…
2Cases cited6 opinions
- Hellmich v. HellmanSupreme Court of the United States · 1928
- BERETTA v. COMMISSIONERUnited States Tax Court · 1942
- Bazley v. CommissionerUnited States Tax Court · 1945
- Long v. CommissionerUnited States Tax Court · 1945
- Mason v. CommissionerUnited States Tax Court · 1944
1 more not listed; retrieve them via the Exa API.
3Cited by2 opinions
- McCarthy v. ConleyDistrict Court, D. Connecticut · 1964
- Kraus Trust v. CommissionerUnited States Tax Court · 1946