Lester Lumber Co. v. Commissioner
United States Tax Court
1. The stockholders of a corporation had personal accounts standing on the books of the corporation against which they could draw at any time. At the annual meeting they agreed to have the surplus credited pro rata to their accounts and 1,971 shares of previously authorized stock issued and charged to such accounts at par. One stockholder received stock for less than his pro rata share of the surplus; the others received stock in excess of their pro rata shares of surplus.
Read the full summary
1. The stockholders of a corporation had personal accounts standing on the books of the corporation against which they could draw at any time. At the annual meeting they agreed to have the surplus credited pro rata to their accounts and 1,971 shares of previously authorized stock issued and charged to such accounts at par. One stockholder received stock for less than his pro rata share of the surplus; the others received stock in excess of their pro rata shares of surplus. Held, the distribution of the surplus was a taxable dividend. 2. One petitioner omitted to report on his return $ 10,160…
1Opinion of the Court
OPINION.
Arnold, Judge:
Immediately prior to December 20,1943, the Lester Lumber Co. had authorized common capital stock of 5,000 shares, par value $100 each, of which 3,029 were outstanding and 1,971 were unissued, and it had a surplus of at least $94,268.54. The stock was held by 15 individuals, each of whom had an open account on the corporation’s books. As of December 20, 1943, there was credited to each stockholder’s account a 4 per cent dividend on his stock, interest on his credit balance at 6 per cent, and a share of the surplus, and, in some cases, an amount representing a gift from…
2Cases cited2 opinions
- Southeastern Finance Co. v. CommissionerUnited States Tax Court · 1945
- F. Brody & Sons Co. v. CommissionerUnited States Tax Court · 1948
3Cited by20 opinions
- ASAT, Inc. v. CommissionerUnited States Tax Court · 1997
- Johnson v. CommissionerUnited States Tax Court · 1980
- Duerr v. CommissionerUnited States Tax Court · 1958
- Geo. W. Ultch Lumber Co. v. CommissionerUnited States Tax Court · 1953
- Thurner v. CommissionerUnited States Tax Court · 1990
15 more not listed; retrieve them via the Exa API.