Morris Investment Corp. v. Commissioner of Int. Rev.

McLAUGHLIN, Circuit Judge.

Petitioner, a Delaware corporation, is a personal holding company. 1 *In 1941, the taxable year, Mrs. Morris was its president and owned 91.87 per cent of its outstanding common capital stock. The balance of the stock was held by the estate of her late husband, her daughter and son-in-law. That stock had been given to the estate, her daughter and son-in-law by Mrs. Morris. Prior to 1941 Mrs. Morris arranged to create three trusts for the benefit of her daughter and grandchildren. To set up these trusts Mrs. Morris arranged to purchase from the taxpayer a quantity of…