Stewart v. Commissioner
United States Board of Tax Appeals
1. The amount paid by a corporation for all the stock held by the owners of 50 percent of its outstanding shares which are then held in its treasury is a statutory distribution made from the most recently accumulated earnings.
Read the full summary
1. The amount paid by a corporation for all the stock held by the owners of 50 percent of its outstanding shares which are then held in its treasury is a statutory distribution made from the most recently accumulated earnings. Sec. 201(b), (c), Act of 1926. 2. A statutory distribution in an amount greater than earnings and profits accumulated after February 28, 1913, leaves nothing for future distribution except (a) prior accumulated earnings and profits, (b) the increment reflected by the appreciation in value of assets, and (c) the original capital. 3. Where a corporation reissued as a…
1Dissent
Smith,
dissenting: In the majority opinion it is held that when the Windsor Tobacco Growers Corporation acquired 400 shares of its stock on December 31, 1926, for cash and securities of an aggregate value of $127,473.40, it distributed by virtue of section 201 (b) of the Revenue Act of 1926 all of its earnings accumulated since February 28, 1913, in the amount of $68,281.69. I dissent. Section 201 provides, so far as material, as follows:
Sec. 201. (a) The term “ dividend ” when used in this title (except in paragraph (9) of subdivision (a) of section 234 and paragraph (4) of subdivision (a)of…
2Cases cited3 opinions
- DeGanay v. LedererSupreme Court of the United States · 1919
- Burnet v. BrooksSupreme Court of the United States · 1933
- Wilson v. CommissionerUnited States Board of Tax Appeals · 1926