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Full-Text Articles in Securities Law
Taxation - Federal Income Tax - Exchange Of Debentures For Preferred Stock As Tax-Free Reorganization, Raymond R. Trombadore S.Ed.
Taxation - Federal Income Tax - Exchange Of Debentures For Preferred Stock As Tax-Free Reorganization, Raymond R. Trombadore S.Ed.
Michigan Law Review
Plaintiff held common and preferred stock of the Gulf States Paper Corporation. In 1942 plaintiff received new debentures in exchange for his preferred stock, pursuant to a plan for the recapitalization of the company whereby the entire 25,000 shares of previously outstanding preferred stock (including plaintiff's 208 shares) were exchanged for new debentures of like value. In 1950 the Commissioner assessed an income tax deficiency against plaintiff, determining that the redemption and cancellation of the preferred stock represented a distribution essentially equivalent to the distribution of a dividend and taxable under section 115(g)(1) of the Internal Revenue Code. Plaintiff sued …
Taxation - Income Taxation Of Stock Dividends, Wallace Mendelson
Taxation - Income Taxation Of Stock Dividends, Wallace Mendelson
Michigan Law Review
In 1929 a stock dividend was paid to the holders of common stock in preferred stock of the dividend paying corporation, which had both common and preferred stock outstanding at the time the stock dividend was declared and paid. The taxpayer, as a holder of common stock, received his pro rata share of the dividend and subsequently within the same taxable year sold the preferred stock which he had so received as a dividend. Held, that under the Revenue Act of 1928, (1) the receipt of the stock dividend was not a taxable occasion, and ( 2) the basis …