Nature of the Case
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Facts
A Corporation paid capital gains to a trust. These were in the form of cash dividends and 1,463 extra shares of stock. The trustees paid to the widow the dividends from income paid but refused to transfer to the widow the 1,436 shares. The trustees contended that this was capital to the trust corpus as they had to pay federal capital gains tax on these shares. There was no guidance gained from the intent of the settlor as how to characterize the capital gains.
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