Adler v. COMMISSIONER OF INTERNAL REVENUE, 7699.
| Decision Date | 22 May 1935 |
| Docket Number | No. 7699.,7699. |
| Citation | 77 F.2d 733 |
| Parties | ADLER v. COMMISSIONER OF INTERNAL REVENUE (two cases). |
| Court | U.S. Court of Appeals — Fifth Circuit |
John W. Townsend, of Washington, D. C., for petitioners.
Frank J. Wideman, Asst. Atty. Gen., Sewall Key and Arnold Raum, Sp. Assts. to Atty. Gen., and Robert H. Jackson, Asst. Gen. Counsel, Bureau of Internal Revenue, and John H. Pigg, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., for respondent.
Before BRYAN, FOSTER, and HUTCHESON, Circuit Judges.
In January, 1927, petitioners Leopold Adler and his wife, principal stockholders of I. Epstein & Bro. Co., received $50,000 and $47,500, respectively, as their shares of a distribution made upon the redemption of a part of the preferred stock of that company, which was issued in 1924 as a 100 per cent. dividend upon common stock and made redeemable after two years. In their income tax returns for 1927 they accounted for the amounts so received as capital net gain; but the Commissioner determined that the redemption of the preferred stock was the essential equivalent of a distribution of a taxable dividend within the meaning of the Revenue Act of 1926, § 201 (g), 26 USCA § 932 (g), and, applying the rate of taxation proper for that section, made additional assessments which were upheld by the Board of Tax Appeals. 30 B. T. A. 897.
In April, 1926, I. Epstein & Bro. Co. by resolution authorized the redemption of half the preferred stock issued two years before, and during that year redeemed half of such of it as was held by the minority stockholders; but when the resolution was adopted the corporation did not have on hand sufficient funds with which to pay petitioners also for half of their preferred stock, and they actually received payment in 1927 as shown by their income tax returns. The Commissioner's notice of deficiency was dated June 28, 1930. Petitioners filed their original petitions before the Board in August of that year, and contended not at all that the taxes were assessed for the wrong year, but only that they were not assessable as taxable dividends under 26 USCA § 932 (g); but by amendments filed in March, 1934, they took the position for the first time that the income taxes involved were assessable in 1926 upon the passage of the resolution authorizing the redemption of preferred stock, and not in 1927 when part of the preferred stock held by them was actually redeemed. They now concede the correctness of the...
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Ryan v. Alexander
...the Commissioner and the trial court. The judgment is affirmed and the costs will be assessed against the executrix. 1 See Adler v. Commissioner, 5 Cir., 77 F.2d 733; Lofquist Realty Co. v. Commissioner, 7 Cir., 102 F.2d 945; Bothwell v. Commissioner, 10 Cir., 77 F.2d 35; Commissioner v. Fa......
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Fostoria Glass Co. v. Yoke
...to avoid income taxes incident to the reception of cash dividends. Commissioner v. Cordingley, 1 Cir., 78 F.2d 118; Adler v. Commissioner, 5 Cir., 77 F.2d 733; Robinson v. Commissioner, 5 Cir., 69 F.2d 972. The more recent decisions, however, including the case of Hill v. Commissioner, 66 F......
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McEuen v. Commissioner of Internal Revenue, 13684.
...We think not, for in this case, unlike in the case of Edward G. Swartz, Inc., v. Commissioner, 5 Cir., 69 F.2d 633, and Adler v. Commissioner, 5 Cir., 77 F.2d 733, there is no question of the statute of limitations, none of estoppel. It has been many times held that the taxpayer on a cash r......