Benjamin v. Commissioner
United States Tax Court
Starmount, a North Carolina corporation, owned between 3,000 and 4,000 acres of land bordering on Greensboro, N.C. Prior to 1964, its outstanding stock consisted of 4,732 shares of class A preferred, 7,255 shares of class B preferred, 3,518 shares of class C preferred, and 1,000 shares of common stock. Voting and management control of the corporation was vested entirely in the class A and class B preferred stock.
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Starmount, a North Carolina corporation, owned between 3,000 and 4,000 acres of land bordering on Greensboro, N.C. Prior to 1964, its outstanding stock consisted of 4,732 shares of class A preferred, 7,255 shares of class B preferred, 3,518 shares of class C preferred, and 1,000 shares of common stock. Voting and management control of the corporation was vested entirely in the class A and class B preferred stock. Petitioner Blanche S. Benjamin owned all of the class A and class B preferred stock. Her three sons, their wives, and her grandchildren owned 2,550 shares of the class C preferred…
1Opinion of the Court
Bruce, Judge:
Respondent determined the following deficiencies in petitioners’ Federal income taxes:
Year Deficiency
1961___ 1 $32,219.05
1964_ 79,531.28
An addition to tax under section 6651(a) of the Internal Revenue Code2 was also asserted against petitioners. However, the parties have by stipulation eliminated that question from our inquiry.
The issues remaining for decision are: (1) Whether a redemption in 1964 of 2,000 shares of Starmount Corp. class A preferred voting stock from petitioner Blanche S. Benjamin, the majority shareholder, was “essentially equivalent to a dividend” under section…
2Cases cited61 opinions
- Pepper v. LittonSupreme Court of the United States · 1939
- United States v. PowellSupreme Court of the United States · 1964
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Burnet v. HarmelSupreme Court of the United States · 1932
- United States v. DavisSupreme Court of the United States · 1970
56 more not listed; retrieve them via the Exa API.
3Cited by72 opinions
- Blanche S. Benjamin v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1979
- Metzger Trust v. CommissionerUnited States Tax Court · 1981
- Cluck v. CommissionerUnited States Tax Court · 1995
- Smith v. CommissionerUnited States Tax Court · 1978
- Merrill Lynch & Co., Inc., and Subsidiaries v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 2004
67 more not listed; retrieve them via the Exa API.