Note 16 — AMENDMENT 16

247 U.S. 339, 344 (1918).—On the other hand, in Lynch v. Turrish, 247 U.S. 221 (1918), the single and final dividend distributed upon liquidation of the entire assets of a corporation, although equalling twice the par value of the capital stock, was declared to represent only the intrinsic value of the latter earned prior to the effective date of the amendment, and hence was not taxable as income to the shareholder in the year in which actually received. Similarly, in Southern P. Co. v. Lowe, 247 U.S. 330 (1918) dividends paid out of surplus accumulated before the effective date of the amendment by a railway company whose entire capital stock was owned by another railway company and whose physical assets were leased to and used by the latter was declared to be a nontaxable bookkeeping transaction between virtually identical corporations.