Douglas v. Edwards

MACK, Circuit Judge.

This suit is brought by the executors of James Douglas, deceased, to recover the sum of $173,579.72, assessed as income tax against funds received by the decedent as part of so-called “depletion distributions” made by the Phelps Dodge Corporation to its shareholders in September and December, 1917. It is the contention of the plaintiffs that these distributions were not dividends in the ordinary course of the business, but were liquidating dividends specifically made from a depletion reserve set up by the corporation under the direction, of, and in accordance with, the…