Kavanaugh v. Commissioner , 6 B.T.A. 298 ( 1927 )

MARY E. KAVANAUGH, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Kavanaugh v. Commissioner

Docket No. 9781.

United States Board of Tax Appeals

6 B.T.A. 298; 1927 BTA LEXIS 3549;

February 24, 1927, Promulgated

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Mary E. Kavanaugh pro se.

W. F. Gibbs, Esq., for the respondent.

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LITTLETON

The Commissioner determined a deficiency of $258.19 for the calendar year 1920. Petitioner claims that the Commissioner erred in subjecting a liquidating dividend of $3,739.87 to normal tax.

FINDINGS OF FACT.

Petitioner is a resident of Wausau, Wis., and during the taxable year 1920, and prior thereto, she was a stockholder in the Kavanaugh-Farrell Co., a Wisconsin corporation. During the year 1920 the Kavanaugh-Farrell Co. disposed of its stock of goods and went out of business. The petitioner owned 17 shares of the stock of the said Kavanaugh-Farrell Co. which were purchased by her on January 31, 1913, at par of $1,700. The amount received by petitioner as a final distribution in 1920 was $5,439.87.

The petitioner filed an income-tax return for the calendar year 1920 and included therein her distributable share of the proceeds of liquidation in excess of the original investment, subject, however, to surtax only. In the audit of the return the Commissioner subjected the distribution above referred to to both normal and surtax.

OPINION.

LITTLETON: The facts in this proceeding are stipulated and the only issue presented is whether the liquidating dividend in excess of the cost of the 17 shares of stock of the Kavanaugh-Farrell Co., which was dissolved in 1920, is subject to the normal tax. The Commissioner held that it was and the petitioner claims that this was an error. The Board has heretofore held that under the provisions of the Revenue Act of 1918 a liquidating dividend is subject to both the normal and surtax. See , and .

Judgment will be entered for the Commissioner.