Adler v. COMMISSIONER OF INTERNAL REVENUE

BRYAN, Circuit Judge.

In January, 1927, petitioners Leopold Adler and his wife, principal stockholders of I. Epstein & Bro. Co., received $50,000 and $47,500, respectively, as their shares of a distribution made upon the redemption of a part of the preferred stock of that company, which was issued in 1924 as a 100 per cent, dividend upon common stock and made redeemable after two years. In their income tax returns for 1927 they accounted for the amounts so received as capital net gain; but the Commissioner determined that the redemption of the preferred stock was the essential equivalent of a…