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Corporations - Capital Reduction Surplus As A Source Of Divided Payments, John B. Huck
Corporations - Capital Reduction Surplus As A Source Of Divided Payments, John B. Huck
Michigan Law Review
At the beginning of 1936, plaintiff, a Wisconsin corporation, had an earned surplus deficit of $106,134.89, and a surplus of $685,642.89 created by a reduction of capital stock. Net earnings for 1936 were $121,515.96, none of which were distributed as dividends. An undistributed profits surtax was assessed on the entire current net earnings. Plaintiff sued for a partial refund under an amendment providing retroactive relief for corporations which were prohibited by law from paying dividends during the existence of a deficit in accumulated earnings at the time when the tax was paid. The district court denied relief. On appeal, held …
Corporations - Preference Rights On Dissolution, Robert B. Fiske, Jr. S.Ed.
Corporations - Preference Rights On Dissolution, Robert B. Fiske, Jr. S.Ed.
Michigan Law Review
The capital structure of the defendant corporation consisted of class A, class B, and preferred stock. According to the articles of association, the class A stock was entitled to a ten percent dividend before any dividend was paid on the class B. After the class B stock had also received a ten percent dividend, the two classes were to share equally in any further dividends. The charter further provided that on dissolution the holders of the class A stock were entitled to cash to the amount of the par value of their stock before any payment in …
Taxation - Federal Income Tax - Extent To Which A Dividend In Kind Is Ordinary Income Under The Internal Revenue Code, Alice Austin S.Ed.
Taxation - Federal Income Tax - Extent To Which A Dividend In Kind Is Ordinary Income Under The Internal Revenue Code, Alice Austin S.Ed.
Michigan Law Review
Taxpayer, a corporate shareholder, received from the corporation a distribution of property which had appreciated in value over its adjusted cost. The earnings and profits of the corporation were sufficient to cover the adjusted cost of the property distributed, but were not sufficient to cover its full fair market value at the time of distribution. The Tax Court held that the fair market value of the distribution was taxable as a dividend only to the extent of the corporation's earnings and profits. On appeal, held, reversed. In determining whether a distribution in kind is a dividend under section 115(a), …