Pullman, Inc. v. Commissioner
United States Tax Court
Held, surrender by sole stockholder of small part of subsidiary's stock and payment from latter of amount of stockholder's cost basis as to such stock, which amount was considerably less than subsidiary's accumulated earnings and profits, constituted a transaction essentially equivalent to the distribution of a taxable dividend under section 115 (g) of the Internal Revenue Code.
1Opinion of the Court
OPINION.
Kern, Judge:
The primary question for consideration here is whether the distribution to petitioner by a subsidiary corporation of $5,042,500 in exchange for 50,000 shares of the subsidiary’s stock, which were canceled, was essentially equivalent to a taxable dividend within the meaning of section 115 (g) of the Internal Revenue Code. Since the shares were redeemed at the figure which represented petitioner’s basis for the stock, and not at book or fair market value, there is no question involved of capital gain or loss. The same facts indicate that the tax effects of the transaction…
2Cases cited3 opinions
- Commissioner v. Estate of BedfordSupreme Court of the United States · 1945
- Natwick v. CommissionerUnited States Board of Tax Appeals · 1937
- Long v. CommissionerUnited States Tax Court · 1945
3Cited by29 opinions
- Eva D. Bradbury v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1962
- Decker v. CommissionerUnited States Tax Court · 1959
- Warrensburg Bd. & Paper Corp. v. CommissionerUnited States Tax Court · 1981
- Woody v. CommissionerUnited States Tax Court · 1952
- Wesley Heat Treating Co. v. CommissionerUnited States Tax Court · 1958
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