McCulloch v. Commissioner

OPINION.

Matthews:

These proceedings, consolidated for hearing and decision, arise upon deficiencies in petitioner’s income taxes for the calendar year 1924 of $13,138.33, and for 1925 of $8,899.97. Three issues are raised, only the first of which applies to both years, the second and third being limited to 1925: (1) The respondent’s inclusion as income of cash dividends of a corporation of which petitioner was a stockholder, paid in 1924 and 1925, petitioner contending that a previous stock dividend declared by the corporation made the subsequent cash dividends a return of capital which should…