Words and Phrases ‘6 vol 22B p 524
C.C.A.5 (Tex.) 1935. Where corporation transferred all its assets, including large profits, to newly organized corporation in exchange for capital stock, and transfer was treated as reorganization under which no gain or loss was to be recognized, profits in hands of newly organized corporation held taxable as "its earnings or profits," within revenue act providing that term "dividend" means any distribution made by corporation to its shareholders whether in money or other property out of "its earnings or profits" accumulated after February 28, 1913; word "its" being possessive pronoun indicating that earnings and profits belong to corporation. Revenue Act 1926, § 201(a), 26 U.S.C.A. (I.R.C.1939) § 115.—Murchison's Estate v. C.I.R., 76 F.2d 641.—Int Rev 3747.
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