TAXATION-INCOME TAX-REALIZATION OF INCOME BY CORPORATION IN DISTRIBUTION OF NOTES TO SHAREHOLDERS

Authors

David H. Armstrong S. Ed., University of Michigan Law SchoolFollow

Abstract

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).

Recommended Citation

David H. Armstrong S. Ed., TAXATION-INCOME TAX-REALIZATION OF INCOME BY CORPORATION IN DISTRIBUTION OF NOTES TO SHAREHOLDERS, 47 Mich. L. Rev. 862 (1949).
Available at: https://repository.law.umich.edu/mlr/vol47/iss6/27