First State Bank v. Commissioner
United States Tax Court
Petitioner bank in previous years charged off and was allowed deduction of notes as worthless. In the taxable year it declared a dividend in kind and distributed such notes to its stockholders. Later in the year recoveries were made on the notes. Held, the taxpayer is not taxable upon such recoveries. General Utilities & Operating Co. v. Helvering, 296 U.S. 200, followed.
1Opinion of the Court
OPINION.
Disney, Judge:
Did the petitioner realize taxable income by the distribution in kind of notes on October 17,1942 ? It relies upon General Utilities & Operating Co. v. Helvering, 296 U. S. 200, as authority that there was no such income. That case, followed by others to the same effect (Estate of H. H. Timken, 47 B. T. A. 494 (518); National Carbon Co., 2 T. C. 57; Lencard Corporation, 47 B. T. A. 58; Ernst Kern Co., 1 T. C. 249 (266)), laid down the rule that the distribution, as a dividend in kind, of property which has appreciated in value since acquisition, does not result in gain…
2Cases cited6 opinions
- Helvering v. CliffordSupreme Court of the United States · 1940
- Helvering v. HorstSupreme Court of the United States · 1940
- Helvering v. EubankSupreme Court of the United States · 1941
- General Utilities & Operating Co. v. HelveringSupreme Court of the United States · 1935
- Ernst Kern Co. v. CommissionerUnited States Tax Court · 1942
1 more not listed; retrieve them via the Exa API.
3Cited by19 opinions
- Commissioner of Internal Revenue v. First State BankCourt of Appeals for the Fifth Circuit · 1948
- Apt v. BirminghamDistrict Court, N.D. Iowa · 1950
- Bradford v. CommissionerUnited States Tax Court · 1954
- Anders v. CommissionerUnited States Tax Court · 1967
- A. B. C. D. Lands, Inc. v. CommissionerUnited States Tax Court · 1964
14 more not listed; retrieve them via the Exa API.