United States v. Joliet & Chicago R. Co., 315 U.S. 44 (1942)

United States v. Joliet & Chicago Railroad Co.

No. 151

Argued January 8, 1942
Decided January 19, 1942
315 U.S. 44

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

1. Sum paid as dividends by a transferee corporation to the stockholders of a transferor corporation, and amounts paid by the transferee corporation as income taxes on the sums so distributed as dividends held, under the Revenue Act of 1928, taxable income of the transferor corporation, although the transfer was of all the transferor’s property, by a "lease" in perpetuity without a defeasance clause, and although the dividends were paid, pursuant to the "lease," by the transferee directly to the stockholders of the transferor. Pp. 46, 49.

2. Article 70 of Treasury Regulations 74, promulgated under the Revenue Act of 1928, authorizing such construction of the Act, held valid. P. 47.

118 F.2d 174, reversed.

Certiorari, 314 U.S. 591, to review the reversal of a judgment disallowing a claim for refund of income taxes.