New York Stocks, Inc. v. Commissioner
United States Tax Court
Petitioner, a mutual investment company, redeemed stock certificates at various times in the taxable year at stockholders' requests, paying net asset value for redeemed stock. The stockholders received, as part of the net asset value of a share of stock, a share of current net earnings up to the date of redemption. Aside from regular dividends, petitioner paid out $ 40,932.69 of its current earnings for the taxable year upon redemptions of stock.
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Petitioner, a mutual investment company, redeemed stock certificates at various times in the taxable year at stockholders' requests, paying net asset value for redeemed stock. The stockholders received, as part of the net asset value of a share of stock, a share of current net earnings up to the date of redemption. Aside from regular dividends, petitioner paid out $ 40,932.69 of its current earnings for the taxable year upon redemptions of stock. Held, petitioner is not entitled to include the above amount in the amount of dividends paid for purposes of the basic surtax credit under section…
1Dissent
Kern, and Oppee, JJ.,
dissenting: In the case before us each of the owners of a class or “series” of stock has the same right as that of every other owner of that stock to surrender his shares and to obtain a distribution of accumulated earnings to the date of redemption. This right existed from the time of the issuance of the stock. It could not be availed of by any shareholder, even with the connivance of the corporation, to obtain preferential treatment over some other shareholder, on the one hand, or to escape his proportionate tax liability on the other. While a stockholder remains such…
2Cases cited1 opinion
- United Artists Theatre Circuit, Inc. v. CommissionerUnited States Tax Court · 1943