Rupe Investment Corporation v. Commissioner of Internal Revenue

WISDOM, Circuit Judge.

This appeal focuses on the tax consequences of the sale of the Baker Hotel in Dallas, Texas. In 1949 Rupe Investment Corporation, the taxpayer, was the record owner of 108,010 shares of Baker Hotel common stock at the time when the hotel company paid a dividend of $9 a share. In its 1950 return Rupe Investment claimed a dividend received credit (85%) for the dividends ($972,-090) on the Baker Hotel stock, under § 26(b) of the Internal Revenue Code of 1939. 1 In the taxpayer’s schedule of sales of inventory securities, the taxpayer claimed an ordinary loss ($927,-430.28)…