Corporate Distributions to Stockholders

  • Vern Krishna


The intricacy of corporate taxation, since the advent of the new legislation in 1972, is now accepted as a fact of life. In this article, Mr. Krishna explains the legal, accounting and economic policy implications of three related areas designated surplus, pre-1972 surplus, and post-1972 surplus distributions. The article examines and evaluates the numerous interrelated variables to be considered in determining the timing and desirability of special and ordinary dividends. Various planning devices are suggested in the article, together with an outline of the pitfalls which await the unwary.