Lynch v. Turrish

Citations

• 247 U.S. 221
• 38 S. Ct. 537
• 62 L. Ed. 1087
• 1918 U.S. LEXIS 1903
• 3 A.F.T.R. (P-H) 2986
• 1 U.S. Tax Cas. (CCH) 18

Syllabus

<p>Due to gradual increase in the market value of timber lands owned by a corporation, the market value of i‘s shares had increased to twice par value by March 1, 1913, when the Income Tax Act of that year took effect- Afterwards the company sold all its property and made final distribution of the proceeds to the shareholders on surrender of their certificates of stock, the amount received by each being twice the par value of his shares but. representing no increase since the effective date of the act. Held, that the value thus received in excess of par was not “income, gains, or profits” of a shareholder, subject to the tax, (a) because it represented merely a conversion of his existing investment, (b) because it did not “arise” or “accjue” after the act became effective.</p>