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Full-Text Articles in Law
Mutual Funds-Trusts And Trustees-Capital Gains Distributions From Mutual Funds: Income Or Principal?, Michigan Law Review
Mutual Funds-Trusts And Trustees-Capital Gains Distributions From Mutual Funds: Income Or Principal?, Michigan Law Review
Michigan Law Review
The growing prevalence of mutual fund shares in the assets of small and medium-sized estates has made the problem of allocating capital gains distributions between income and principal a matter of great concern to the trustees of such estates. A "capital gains" distribution represents a gain resulting from the profitable sale of securities held by the mutual fund. The uncertain state of the law regarding capital gains distributions from mutual funds presents a serious dilemma to the trustee: if he distributes the capital gains to the life beneficiary, the remainderman may claim that such distributions represent a partial liquidation of …
Identification Of Property Subject To The Federal Estate Tax, Charles L.B. Lowndes, Richard B. Stephens
Identification Of Property Subject To The Federal Estate Tax, Charles L.B. Lowndes, Richard B. Stephens
Michigan Law Review
Although the federal estate tax is imposed on the "transfer" of property, the amount of the levy is a specified percentage of the taxable estate. Correct computation of the tax depends, therefore, upon accurate identification of the property included in the taxable estate. However, the determination and application of the rules governing identification are relatively uncharted areas.
Corporations- Allocation Of Subsidiary's Tax Benefit From Consolidated Return, Thomas B. Ridgley
Corporations- Allocation Of Subsidiary's Tax Benefit From Consolidated Return, Thomas B. Ridgley
Michigan Law Review
Defendant parent corporation received from its subsidiary 3,556,992 dollars in tax benefits which had accrued to the subsidiary from filing a consolidated income tax return. By agreement between parent and subsidiary, the profit-making corporation was to pay the losing corporation the savings created by the consolidated return. The working relationship of the two assured the subsidiary profits and the parent losses. Consequently, nearly all tax benefit inevitably flowed to the parent. Plaintiffs, the subsidiary's minority stockholders, sought a refunding of benefits allocated to defendant, claiming that the agreement was unfair and alleging that the defendant, as the subsidiary's majority shareholder, …
Taxation-Federal Income Tax-Liquidation Distributions Entitled To Both Capital Gains Treatment And Foreign Tax Credit, Lloyd C. Fell
Taxation-Federal Income Tax-Liquidation Distributions Entitled To Both Capital Gains Treatment And Foreign Tax Credit, Lloyd C. Fell
Michigan Law Review
Plaintiff, Associated, is an American corporation whose wholly-owned subsidiary, Automatic, owned all the stock of Filcrest, a Canadian corporation. In 1954 all the assets of Filcrest were distributed to Automatic pursuant to a plan of complete liquidation, accomplished in accordance with Canadian law. In its 1954 consolidated return, plaintiff treated the gain realized on the Filcrest liquidation as a capital gain, and also claimed a foreign tax credit for any Canadian income, war or excess profits taxes which Filcrest had paid over the years to Canada on that part of the liquidation distribution which represented Filcrest's accumulated earnings and profits. …
Federal Taxation - Tax Aspects Of Corporate Buy And Sell Agreement, Joel D. Tauber S.Ed.
Federal Taxation - Tax Aspects Of Corporate Buy And Sell Agreement, Joel D. Tauber S.Ed.
Michigan Law Review
It is the purpose of this comment to consider the tax problems connected with both types of "conventional" corporate buy and sell agreements. It should be recognized, however, that there are many questions of local law and business necessity that also exert influence on the use of such agreements.
Taxation - Federal Income Tax Deductibility Of Interest On Debentures Issues As A Dividend, Jules M. Perlberg
Taxation - Federal Income Tax Deductibility Of Interest On Debentures Issues As A Dividend, Jules M. Perlberg
Michigan Law Review
Taxpayer, a wholly-owned subsidiary corporation, had filed consolidated returns with its parent prior to 1934. When Congress abolished consolidated returns in that year, the subsidiary issued 6% debentures as a dividend to the parent company and subsequently deducted the interest paid on these bonds. The Commissioner claimed the interest payments were really dividends and were not deductible. The Tax Court upheld the Commissioner pointing out the tax-saving motive, absence of new investment, and parent-subsidiary relationship as factors indicating that no genuine debtor-creditor relationship existed. On appeal, held, reversed. The debentures involved were conventional in form and created a valid …
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), …
Taxation-Income Tax-Realization Of Income By Corporation In Distribution Of Notes To Shareholders, David H. Armstrong S. Ed.
Taxation-Income Tax-Realization Of Income By Corporation In Distribution Of Notes To Shareholders, David H. Armstrong S. Ed.
Michigan Law Review
A corporation charged off notes as worthless prior to 1942. Anticipating future collections on the notes, the corporation distributed them as a dividend in kind. The commissioner determined that the amount collected subsequent to distribution was taxable to the corporation. The Tax Court held that no income was realized by the corporation. On appeal, held, reversed. This was not a distribution of capital assets but rather an assignment of anticipated income. Commissioner v. First State Bank of Stratford, (C.C.A. 5th, 1948) 168 F. (2d) 1004, certiorari denied, 335 U.S. 867, 69 S.Ct. 137 (1948).