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Boulware v. United States

Docket No.: 06-1509
Certiorari Granted: 9/25/2007
Argued: January 8, 2008
Decided: March 3, 2008

Topic:

A taxpayer may claim that a co

PartyNames: BOULWARE v. UNITED STATES
Petitioner: Michael H. Boulware
Respondent: United States

Court Below: United States Court of Appeals for the Ninth Circuit

Michael H. Boulware
v.
United States
552 U.S. 421 (2008)
Consideration Limited:

GRANTED LIMITED TO THE FOLLOWING QUESTION: "WHETHER THE DIVERSION OF CORPORATE FUNDS TO A SHAREHOLDER OF A CORPORATION WITHOUT EARNINGS AND PROFITS AUTOMATICALLY QUALIFIES AS A NON-TAXABLE RETURN OF CAPITAL UP TO THE SHAREHOLDER'S STOCK BASIS, SEE 26 U.S.C. ยง301(c)(2), EVEN IF THE DIVERSION WAS NOT INTENDED AS A RETURN OF CAPITAL." EXPEDITED BRIEFING SCHEDULE

Question Presented:

1. What effect must a federal court give a final, non-collusive state court judgment adjudicating ownership of property in determining a taxpayer's federal income tax liability arising from that property? 2. Whether a taxpayer who seeks to invoke the return of capital rule in a criminal tax case must show a contemporaneous intent to treat the corporate distribution as a return of capital?

Question:

Does the return of capital rule apply automatically when a company without earnings or profits distributes money to a shareholder, or must the taxpayer produce contemporaneous evidence that the money was treated as a return of capital when distributed?

Note:

THE PETITION FOR A WRIT OF CERTIORARI IS

Holding: judgment vacated and remanded
Decision: Decision: 9 votes for Boulware, 0 vote(s) against
Vote: 9-0
Opinion By:
Read BOULWARE V. UNITED STATES opinion (PDF)

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