United States Tax Court May 15, 1956, Docket Nos. 54417, 54418 (French v. Commissioner)

lead-opinion

OPINION.

Johnson, Judge:

The respondent has determined that the cancellation of petitioners’ notes to Cooper-Smith and the concurrent retirement by the corporation of a part of petitioners’ stock occurred at such time and in such manner as to be essentially the equivalent of a taxable dividend within the meaning of section 115 (g) of the Internal Revenue Code of 1939, and in support