Court Opinion

ID: 4492865
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:03:38.457392+00
Date Added: 2024-06-11T15:03:58.497491
License: Public Domain

Smith,
dissenting: The respondent has treated the 1925 dividends, to the amount of the corporation’s surplus at the date of the payment of the dividends ($50,204.18), as ordinary dividends under section 210 (a) of the Revenue Act of 1926. The respondent followed the letter of the law in such treatment. There were no distributions in complete liquidation under section 201 (d) in 1925, and none in partial liquidation as that term is defined in section 201 (h), which subdivision reads:
As used in this section the term “ amounts distributed in partial liquidation ” means a distribution by a corporation in complete cancellation or redemption of a part of its stock, or one of a series of distributions in complete cancellation or redemption of all or a portion of its stock.
There was clearly an intent that the dividend of $60 per share declared in 1925 should be a liquidating dividend. The petitioner recognized, however, that the dividend of $90 per share in 1925 was *168not in partial liquidation of his stock and returned the amount as a taxable dividend in his original return. There was no actual liquidation until 1927.