(DOWNLOAD) "Ramapo Inc. v. Commissioner of Internal Revenue" by Second Circuit Circuit Court Of Appeals * eBook PDF Kindle ePub Free
eBook details
- Title: Ramapo Inc. v. Commissioner of Internal Revenue
- Author : Second Circuit Circuit Court Of Appeals
- Release Date : January 06, 1936
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 63 KB
Description
The taxpayer is a corporation which keeps its books and makes its income tax returns on a cash receipts and disbursements basis. During the year 1929 it was a stockholder of the American Superpower Corporation (hereafter for brevity referred to as "Superpower"). By resolutions adopted in January, May, and June, 1929, Superpower gave its stockholders rights to purchase from it at stated prices shares of common stock of the United Corporation and the Commonwealth & Southern Corporation. Some of the rights so received by the taxpayer it exercised; others it sold. It also sold some of the shares acquired by the exercise of these rights. This appeal raises questions as to how the rights shall be treated for income tax purposes. The taxpayer considered them dividend distributions by Superpower under section 115 (a) of the Revenue Act of 1928, 26 U.S.C.A. § 115 and note, and returned as dividends the fair market value of each group of rights on the respective dates on which the certificates therefor were actually received, namely, February 1, May 13, and June 24, 1929. The Commissioner likewise treated the value of the rights as dividends, but determined the value as of the dates fixed by the respective resolutions for ascertaining the stockholders of record entitled to receive them; namely, January 26, May 8, and June 18. By amended answer, however, the Commissioner moved to increase the deficiency determined by him, if he had made any errors in favor of the taxpayer. The Board of Tax Appeals ruled that the rights were not dividend distributions at all, but merely represented offers by Superpower to sell certain of its assets to its stockholders pro rata. Hence it held that the rights cost the taxpayer nothing and the entire amount received from the sale of rights constituted taxable income; and that the basis for computing the gain on the sale of shares of stock acquired by exercise of the rights was the amount paid for such shares. This produced the deficiency complained of.
 "Ramapo Inc. v. Commissioner of Internal Revenue" by Second Circuit Circuit Court Of Appeals * eBook PDF Kindle ePub Free){kind=link}