Miele v. Commissioner
United States Tax Court
A corporation issued certificates labeled as "preferred stock" as a means of obtaining additional capital. Later the preferred stock was redeemed in a prorata redemption which left the shareholders of the corporation in exactly the same relationship with respect to the ownership of the corporation as they occupied prior to the redemption. Held: (1) The certificates issued by the corporation were preferred stock and not evidence of indebtedness.
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A corporation issued certificates labeled as "preferred stock" as a means of obtaining additional capital. Later the preferred stock was redeemed in a prorata redemption which left the shareholders of the corporation in exactly the same relationship with respect to the ownership of the corporation as they occupied prior to the redemption. Held: (1) The certificates issued by the corporation were preferred stock and not evidence of indebtedness. (2) The prorata distributions made by the corporation in redemption of its preferred stock were essentially equivalent to a dividend and do not…
1Opinion of the Court
Qtjealy, Judge:
The respondent determined deficiencies in the Federal income taxes due from the petitioners as follows:
Docket No 405-70. 421-70. 422-70. 423-70. Year Deficiency 1965 $7, 679. 52 1966 8, 386. 20 1965 7, 354. 70 1966 6, 054. 23 1965 5, 799. 74 1966 6, 417. 35 1965 5, 777. 85 1966 5, 073. 45
The issues presented for decision are:(1) As to all dockets, whether petitioners, who own 100 percent of the voting stock of a corporation, are required to treat the prorata redemption of nonvoting stock held in proportion to their common stock holding as a dividend rather than as a return of…
2Cases cited38 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- Gray v. PowellSupreme Court of the United States · 1941
- Benjamin D. And Madeline Prentice Gilbert v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1957
- United States v. DavisSupreme Court of the United States · 1970
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3Cited by38 opinions
- Benjamin v. CommissionerUnited States Tax Court · 1976
- Ralph D. Crowley and Frances A. Crowley v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1992
- Fehrs Finance Co. v. CommissionerUnited States Tax Court · 1972
- Robin Haft Trust v. CommissionerUnited States Tax Court · 1973
- Roebling v. CommissionerUnited States Tax Court · 1981
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