Commissioner of Internal Revenue v. Estate of Bedford
United States Supreme Court
325 U.S. 283 (1945)
Facts
The estate of Edward Bedford (estate) (plaintiff) owned 3,000 shares of preferred stock of Abercrombie & Fitch Company. Pursuant to a recapitalization plan that was devised to distribute earnings in compliance with state law, the estate exchanged the preferred stock for cumulative preferred stock, common stock, and $45,240 cash. The estate reported the cash as capital gains on the sale of the preferred stock. The commissioner of the Internal Revenue Service (defendant) assessed additional tax, claiming that the cash was taxable as a dividend. The estate appealed the assessment to the United States Tax Court, which ruled in favor of the commissioner. The United States Court of Appeals for the Second Circuit reversed the decision on appeal and ruled in favor of the estate. The commissioner then appealed to the United States Supreme Court.
Rule of Law
Issue
Holding and Reasoning (Frankfurter, J.)
What to do next…
Here's why 710,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 44,600 briefs, keyed to 983 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.
