Columbia Pacific Shipping Co. v. Commissioner

Seawell,

dissenting: I disagree with the conclusion reached on the second issue.

When petitioner’s board of directors resolved, as it did, that “ $619,760.00 be and it is appropriated and set aside from the surplus profits of the company for the payment of a ten hundred sixteen percent (1,016%) dividend upon its outstanding capital stock,” it created a liability of itself to its sole stockholder in the sum of $619,760. W. E. Caldwell Co., 6 B.T.A. 47. When petitioner discharged that liability, under a further resolution of its directors and the consent and acquiescence of the stockholder, by…