Wilson v. Commissioner
United States Tax Court
1. Two brothers, sole equal shareholders of the taxpayer corporation, contributed to it cash as paid-in surplus in 1931 and orally agreed that either might make withdrawals up to $ 150,000. Each did so in succeeding years, making no notes and paying no interest. The withdrawals were carried in an account receivable by the corporation and some deposits by the brothers were later credited to it.
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1. Two brothers, sole equal shareholders of the taxpayer corporation, contributed to it cash as paid-in surplus in 1931 and orally agreed that either might make withdrawals up to $ 150,000. Each did so in succeeding years, making no notes and paying no interest. The withdrawals were carried in an account receivable by the corporation and some deposits by the brothers were later credited to it. The shareholders' withdrawals, held, on the evidence to be distributions of dividends and not loans. 2. Amounts paid by the taxpayer corporation to its two shareholding officers, held, on the evidence…
1Opinion of the Court
OPINION.
Johnson, Judge:
1. Petitioner assails the determination that withdrawals of $47,500 (stipulated, however, to be $45,000) in 1939 and of $16,000 in 1940 were dividends paid to him by the corporation and not loans, as he contends. He stresses in support of his view the informal understanding between his brother and himself when their mother’s gift of cash was contributed to paid-in surplus; the charging of the withdrawals to their personal accounts; the crediting of them to the corporation’s accounts receivable; and some repayments made by each shareholder. By section 115 (a) of the…
2Cases cited1 opinion
- Wiesler v. CommissionerUnited States Tax Court · 1946
3Cited by66 opinions
- Electric & Neon, Inc. v. CommissionerUnited States Tax Court · 1971
- Baird v. CommissionerUnited States Tax Court · 1955
- Haber v. CommissionerUnited States Tax Court · 1969
- Kaplan v. CommissionerUnited States Tax Court · 1965
- Miele v. CommissionerUnited States Tax Court · 1971
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