Rands, Inc. v. Commissioner
United States Board of Tax Appeals
1. A corporation, substantially all the shares of which were owned by an individual, to which he had contributed large amounts of securities for shares and to which he made large loans without interest, which traded in securities at profit, and which made no distributions, held, notwithstanding a diminution in 1929 and 1930 in the value of its securities, to have been formed and availed of for the purpose of enabling its shareholders to escape surtax, etc., and subject in…
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1. A corporation, substantially all the shares of which were owned by an individual, to which he had contributed large amounts of securities for shares and to which he made large loans without interest, which traded in securities at profit, and which made no distributions, held, notwithstanding a diminution in 1929 and 1930 in the value of its securities, to have been formed and availed of for the purpose of enabling its shareholders to escape surtax, etc., and subject in 1927, 1928, 1929, and 1930 to the 50 percent tax provided by section 220, Revenue Act of 1926, and section 104, Revenue…
1Opinion of the Court
*1101OPINION.
Sterniiagen :
The Commissioner determined for each of the years 1927, 1928, 1929, and 1930:
* * ⅜ you have incurred liability under the provisions of section 220 of the Revenue Act of 1926 and section 104 of the Revenue Act of 1928.1 The fact that your company is a mere holding or investment company and has permitted your gains and profits to accumulate beyond the reasonable needs of the business instead of being distributed, is construed as prima facie evidence of a purpose to prevent the imposition of the surtax upon your stockholders. Accordingly, you are subject to a tax equal to 50…
2Cases cited6 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Burnet v. Commonwealth Improvement Co.Supreme Court of the United States · 1932
- United States v. FlannerySupreme Court of the United States · 1925
- McCaughn v. LudingtonSupreme Court of the United States · 1925
- Goodrich v. EdwardsSupreme Court of the United States · 1921
1 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- Charleston Lumber Co. v. United StatesDistrict Court, S.D. West Virginia · 1937
- Mead's Bakery, Inc. v. CommissionerUnited States Tax Court · 1964
- Almours Secur., Inc. v. CommissionerUnited States Board of Tax Appeals · 1936
- Automotive Rebuilding Co. v. CommissionerUnited States Tax Court · 1958
- Chicago Stock Yards Co. v. CommissionerUnited States Board of Tax Appeals · 1940
3 more not listed; retrieve them via the Exa API.