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…
1Opinion of the Court
OPINION.
HaRBon, Judge:
Respondent contends that the sums which were distributed to stockholders, upon the redemption of stock, as shares of net earnings for the taxable year up to redemption dates as part of lump sums paid upon the redemption of shares of stock were in the nature of “preferential dividends” as defined in section 27 (h) of the Internal Revenue Code,1 and that, therefore, they can not be considered as “dividends paid” for the purpose of computing the basic surtax credit under section 27 (b) (1) of the code.2 The amount in dispute is $40,932.69. Petitioner claims that the total…
2Cases cited1 opinion
- United Artists Theatre Circuit, Inc. v. CommissionerUnited States Tax Court · 1943
3Cited by4 opinions
- National Sec. Series--Industrial Stocks Series v. CommissionerUnited States Tax Court · 1949
- Barney Mach. Co. v. CommissionerUnited States Tax Court · 1947
- National Sec. Series--Industrial Stocks Series v. CommissionerUnited States Tax Court · 1949
- New York Stocks, Inc. v. CommissionerUnited States Tax Court · 1947