Mark E. Degroff and Loveta S. Degroff v. Commissioner of Internal Revenue

This is an appeal from a decision of the United States Tax Court wherein that court upheld the Commissioner’s determination of a deficiency assessment against taxpayers, husband and wife, for personal income taxes for the year 1964. The single issue presented is whether corporate distributions made to' taxpayers as the sole shareholders in Medco Electronics Co., Inc. were received as liquidating distributions from that company or as part of a corporate reorganization with another corporation wholly owned by taxpayers and thus properly taxed as dividends under 26 U.S.C. § 356(a) (2). The Tax…