The Georgetown Law Journal Volume 10

Download or read book The Georgetown Law Journal Volume 10 written by Georgetown University Law and published by Theclassics.Us. This book was released on 2013-09 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt: This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1921 edition. Excerpt: ... (all earnings or profits having already been distributed), such liquidating distribution is exempt from taxation, but is applied to reduce the basis for determining gain or loss on a subsequent sale of the stock. Sec. 201 (c) of the new law, taken in conjunction with subdivisions (2) and (3) of Sec. 202 (c), infra, constitutes a flagrant tax cushion as to capital accretions subsequent to March 1, 1913. Specific exemption is provided for stock dividends in accordance with the Supreme Court decision in Eisner v. Macomber." However, where after any such dividend the corporation proceeds to cancel or redeem the stock, in such manner as to make the entire transaction equivalent to the distribution of a taxable dividend, then the amount received in redemption or cancellation of the stock is taxable to the extent of the earnings therein accumulated after February 28, 1913. BASIS FOR DETERMINING GAIN OR LOSS. Sec. 202 (b). It is now expressly stated that the cost of property acquired either after February 28, 1913, or before March 1, 1918" shall ordinarily be the basis for ascertaining the gain derived or the loss sustained from a sale or other disposition thereof. The genersl effect of subdivision (b), Sec. 202, of the new act ia not only to (1920) 252 U. S. 189, 40 Sup. Ct. 189. Cf. (1918) 31 Ops. Atty. Gen. 213. The decision in Eisner v. Macomber is discussed by Mr. Eustace Seligman in an able article entitled "Implications and Effects of the Stock Dividend Decision," 21 Columbia Law Rev. 313. The distribution by a corporation of stock held by it in another corporation has been recently held to constitute income taxable to the recipients. United States v. Phellis (1921) 42 Sup. Ct. 6.5; John D. Rockefellerv. United States (1921) 42...