Commissioner of Internal Revenue v. Sullivan

Congress has consistently and wisely, I think, been as. definite and objective as possible in defining what corporate distributions constitute taxable dividends. It has left as small field as is required by necessity for the operation of such uncertainties and variables as the motives, plans, or business purposes of the corporation or its stockholders. The general rule is that any distribution of either money or property by a corporation to its stockholders constitutes a taxable dividend to the extént of the corporation’s earnings and profits. Internal Revenue Code Sec. 115 (a) and (b). There…