Jarvis v. Commissioner
United States Board of Tax Appeals
1. A purchase in 1934 by a corporation, which was not in existence in 1913, of one-tenth of its outstanding shares for a price in excess of one-tenth of its paid-in capital, held to absorb accumulated earnings and profits in the amount of such excess. 2. A distribution in 1935 in an amount greater than the earnings and profits acquired after exhaustion by distribution in 1934, held, to the extent of such excess, not taxable as a dividend, but properly chargeable to capital…
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1. A purchase in 1934 by a corporation, which was not in existence in 1913, of one-tenth of its outstanding shares for a price in excess of one-tenth of its paid-in capital, held to absorb accumulated earnings and profits in the amount of such excess. 2. A distribution in 1935 in an amount greater than the earnings and profits acquired after exhaustion by distribution in 1934, held, to the extent of such excess, not taxable as a dividend, but properly chargeable to capital account. Foster v. United States,303 U.S. 118, distinguished.
1Opinion of the Court
*443OPINION.
Steknhagen:
1. Petitioner contends that the later 1935 dividends were traceable in part to Acheson Corporation’s capital and paid-in surplus because its accumulated earnings had been exhausted by prior distributions. The circumstances of the 1934 distribution were as follows: "
The Acheson Corporation was organized in 1915, with a capital stock of $1,000,000, represented by 10,000 shares, all of which were issued to Edward G. Acheson. It began with a paid-in surplus of $911,499.66. Petitioner insists that the distribution of $f¿6fijlfl0 in June 1934 served to reduce by $1,060,000 the…
2Cases cited2 opinions
- Foster v. United StatesSupreme Court of the United States · 1938
- Helvering v. CanfieldSupreme Court of the United States · 1934
3Cited by19 opinions
- Enoch v. CommissionerUnited States Tax Court · 1972
- Maloney v. SpencerCourt of Appeals for the Ninth Circuit · 1949
- Anderson v. CommissionerUnited States Tax Court · 1976
- Helvering v. JarvisCourt of Appeals for the Fourth Circuit · 1941
- Van Clief v. HelveringCourt of Appeals for the D.C. Circuit · 1943
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