5 T.C. 1251">*1251 The Young-Wolf Corporation was in existence during all of the fiscal year ended November 30, 1937. Subsequently, it became the Gary Theatre Corporation. The Commissioner made the following determination against that corporation for the fiscal year ended November 30, 1937 (Docket No. 2849):

He also determined that the Gary Theatre Corporation was liable as a transferee of Young-Wolf Corporation for the amounts set forth above (Docket No. 2850). He determined a deficiency in income tax against V. U. Young in the amount of $ 99,204.69 for the calendar year 1937 (Docket No. 2848).

The issues in the Gary Theatre Corporation cases are (1) whether the statute of limitations had run at the time the notices were mailed and (2) whether Young-Wolf Corporation received a taxable dividend as a result of sales of securities made by its wholly owned subsidiary, Gary Theatre Co., for less than the fair market value of the securities 5 T.C. 1251">*1252 to trusts created by1945 U.S. Tax Ct. LEXIS 23">*26 its principal stockholders, Young and Wolf. Gary Theatre Corporation concedes that it is liable for any taxes and penalties which have been properly determined for the year in question. Petitioner Young contends that the income of the four trusts which he created in 1937 for the benefit of his children and grandchildren was erroneously included in his income, and he also contends that the Commissioner erred in holding that he received a dividend as a result of the sales of securities made by the Gary Theatre Co. to the four trusts for less than the fair market value of those securities.

FINDINGS OF FACT.

Petitioner V. U. Young is an individual who resides in Gary, Indiana. He filed his income tax return for the calendar year 1937 with the collector of internal revenue at Indianapolis, Indiana.

Petitioner Gary Theatre Corporation is a corporation organized under the laws of Indiana. It was known as Young-Wolf Corporation during the fiscal year ended November 30, 1937. It was admittedly a personal holding company within the definition contained in section 351 (b) (1) of the Revenue Act of 1936. It filed its corporation income and excess profits tax return and its personal holding1945 U.S. Tax Ct. LEXIS 23">*27 company return for the fiscal year ended November 30, 1937, with the collector of internal revenue for the district of Indiana. Those returns were filed under the name of Young-Wolf Corporation. The income and excess profits tax return was filed on February 15, 1938. The personal holding company return was filed on March 15, 1938. The gross income shown on the income tax return amounted to $ 40,821.06. Consents were filed extending the time for determining the deficiency in income and excess profits tax to June 30, 1944, provided section 275 (c) of the Revenue Act of 1936 applied, i. e., if gross income had been omitted from the return in excess of 25 percent of the amount of gross income shown on the return. The notice of deficiency was mailed on June 9, 1943.

Young-Wolf Corporation owned, during the year 1937, all of the stock of Gary Theatre Co. except three qualifying shares which were held one each by C. J. Wolf, Young, and Mrs. Young. The cost of the stock as shown on the books of Young-Wolf Corporation was $ 331,272.48.

The outstanding stock of Young-Wolf Corporation was held as follows on November 9, 1937:

1945 U.S. Tax Ct. LEXIS 23">*28 5 T.C. 1251">*1253 The son of Young was one of the twelve other persons referred to in the above table and owned some of the preferred and some of the common stock.

Gary Theatre Co. was the owner on November 9, 1937, of 1,000 shares of stock of Theatrical Managers, Inc., which had cost it $ 15,828. The value of the 1,000 shares of stock at that time was in excess of $ 100,000.

The annual meeting of the stockholders of Gary Theatre Co. was held on November 1, 1937. The chairman stated that he deemed it advisable to sell the stock of Theatrical Managers, Inc., at a price involving no loss to the company in view of the fact that personal holding companies would probably be subjected to additional taxes, whereupon officers were authorized to negotiate a sale of the 1,000 shares of Theatrical Managers, Inc., stock at a price involving no loss to the company.

V. U. Young executed four trusts on November 3, 1937, one each for the benefit of his son, daughter, grandson, and granddaughter. The son was 32 years of age at that time. He resided in Indianapolis and had sufficient independent income from salary received from Theatrical Managers, Inc., to support himself and his one-year-old son, another1945 U.S. Tax Ct. LEXIS 23">*29 of the trust beneficiaries. The petitioner's daughter was 35 years of age in 1937 and resided with her 14-year-old daughter, another beneficiary, in Gary. The record does not show whether or not they lived with her father at that time. The petitioner named himself as sole trustee of each of the trusts.

The following provisions of the trust for the son are typical of all four trusts:

1. I am to have the power at any time, and from time to time, to sell any of the trust property or estate for such price or prices as I may determine. Any money coming into my hands as the proceeds of any such sale or otherwise and forming a part of the principal of said trust estate, shall as soon as practical, be reinvested by me. In making such investments, I am to have full power to purchase any property, real or personal, (including notes and/or securities) which I may think desirable to acquire or hold as a part of the said trust estate, and I am not to be restricted to the purchase of such property as is ordinarily deemed advisable for trust property. I am likewise to have the power to rent or lease any and all real estate which may be included in said trust property for terms of any duration, 1945 U.S. Tax Ct. LEXIS 23">*30 whether such terms shall extend to a time beyond the termination of this trust or not. I am likewise to have full power and authority at my discretion to borrow money and secure the sums so borrowed by pledge or mortgage of any and all portions of said trust estate and I may, out of the corpus or income of said trust estate, or out of both such corpus and/or income repay the sums so borrowed. I am to have full authority to invest or re-invest any sums so borrowed; and to collect and receive the rents, income and profits arising from the trust estate therein created. It being my intention to retain as Trustee, such rights, power and authority in respect to the management, control and distribution of said trust estate for the use and benefit of the beneficiary, as I have with respect to property absolutely owned by me.

5 T.C. 1251">*1254 2. Out of the income and revenue accrued from said trust estate I shall have power to pay all taxes, expenses necessary or properly incident to its care, preservation and management; and all other reasonable or necessary charges incident to the administration of the trust created hereby. Any income not distributed, shall be added to the principal of the1945 U.S. Tax Ct. LEXIS 23">*31 trust estate.

3. In case of emergency, or illness of said beneficiary, requiring a greater sum than that accruing as income or revenue, I shall have power to use as much of the principal of said trust estate as may be necessary.

4. Any receipt given by the beneficiary of this trust to me for any sum paid to him by me shall be in full acquittance and discharge for the payment mentioned in such receipt.

5. The foregoing provisions for my said son, Robert Rex Young, shall be for his sole and separate use free from all statutory and marital rights of his wife; and free from his debts and without the right on his part to assign, pledge, hypothecate, or anticipate, or in any way create a lien upon any of the income or corpus of the trust estate hereby created before he shall receive the same, nor shall any of the said income or corpus be subject to any claims of any persons who may at any time be creditors of my said son, Robert Rex Young.

(a) If the said beneficiary should die before my death then this trust estate shall thereupon revert to me and become mine immediately and absolutely, or

(b) If I should die after said beneficiary reaches the age of 30, then this property shall thereupon1945 U.S. Tax Ct. LEXIS 23">*32 become his immediately and absolutely and be turned over to him and in either case this trust shall cease.

* * * *

The other trust contained identical provisions except for the names of the beneficiaries, and the trusts for the two grandchildren provided for successor trustees to carry on the trusts until the beneficiary should reach the age of 30 in case the petitioner should die before that time.

The petitioner transferred $ 15,000 in cash to each trust during November 1937. He transferred to each trust, before the close of 1937, shares of preferred and common stock owned by him in Young-Wolf Corporation and received from each trust an amount which represented the cost of that stock to him. Each trust had over $ 11,000 of income during 1937. The petitioner borrowed money from each trust on his interest-bearing promissory notes. He repaid all loans with interest. A separate bank account was maintained for each trust and separate accounts were kept of the transactions of each trust. $ 1,824.65 was distributed to the son in 1937, but no other distributions were made from any of the trusts. The four trusts were terminated in 1944, at which time all of the assets were distributed1945 U.S. Tax Ct. LEXIS 23">*33 to the beneficiaries.

Gary Theatre Co. on November 9, 1937, transferred to each of the 4 trusts created by Young, 125 shares of the stock of Theatrical Managers, Inc., and 100 shares of that same stock to each of the 5 trusts created by Wolf, receiving from the trustees of the 9 trusts cash in the total amount of $ 15,828.

5 T.C. 1251">*1255 The return of Young-Wolf Corporation showed a deficit of $ 1,774.35 at November 30, 1937.

The Commissioner, in determining the deficiencies against Gary Theatre Corporation, held that it had constructively received a dividend in the amount of $ 254,172 from Gary Theatre Co. in the form of common stock of Theatrical Managers, Inc., which was passed on to and utilized by two of its common stockholders, Young and Wolf.

The Commissioner, in determining the deficiency against Young, held that he had received a dividend of $ 127,086 from Young-Wolf Corporation, and that net income of the four trusts amounting to $ 45,200 was taxable to Young under the provisions of sections 22, 166, and 167 of the Revenue Act of 1936.

Incorporated herein by this reference1945 U.S. Tax Ct. LEXIS 23">*34 and made a part hereof are all of the stipulations filed by the parties in these three proceedings, together with additional facts stipulated into the record and documents admitted in evidence without objection.

OPINION.

The Commissioner has held that the income of the four trusts created by Young is all taxable to him. He argues that this determination was proper under section 22 (a) of the Revenue Act of 1936, as interpreted by the courts, particularly by the Supreme Court in Helvering v. Clifford, 309 U.S. 331">309 U.S. 331. The petitioner gave himself broad administrative powers over the trusts, including the investment of the trust funds and the distribution of the trust income and principal. The beneficiaries were members of his immediate family. He exercised the powers which he gave himself. The Commissioner did not err in holding the petitioner taxable on the income of the four trusts. 309 U.S. 331">Helvering v. Clifford, supra;Stockstrom v. Commissioner, 148 Fed. (2d) 491; Funsten v. Commissioner, 148 Fed. (2d) 805; Edison v. Commissioner, 148 Fed. (2d) 810;1945 U.S. Tax Ct. LEXIS 23">*35 Anna Morgan, 5 T.C. 1089.

The Commissioner has held and he contends that Gary Theatre Co. transferred the stock of Theatrical Managers, Inc., to the trusts created by Young and Wolf for an amount grossly disproportionate to the value of the stock at the time of the transfer. We have made a finding that the value of the stock was in excess of $ 100,000 on November 9, 1937. The deficiencies are based upon a value of $ 270,000 for the stock. There is evidence which tends to support that determination. However, the only witness who expressed an opinion as to the value of the stock on the date in question, the respondent's own witness, stated that the value of the stock was $ 225 a share, or $ 225,000. The petitioner argues that the value of the stock was not in excess of $ 123,231.39. It is not necessary to determine the exact value of the stock. It is apparent that Gary Theatre Co. transferred the securities 5 T.C. 1251">*1256 which it owned to the trusts created by Young and Wolf for an amount which was much less than the value of those securities.

The Commissioner argues further that this sale must be treated as the distribution of a dividend by the Gary1945 U.S. Tax Ct. LEXIS 23">*36 Theatre Co., and this dividend must be traced through Young-Wolf Corporation, the sole stockholder of Gary Theatre Co., to Young and Wolf, the controlling stockholders of Young-Wolf Corporation. The evidence shows that Young and Wolf were the controlling stockholders of Young-Wolf Corporation. They owned 97.7 percent of the common. Some shares of the preferred and common stock of that corporation were owned by twelve other persons. The record does not show who they were, except that Young's son owned some of the preferred and common stock. If interests unrelated to Young and Wolf owned any of the common, they certainly would have had a right to complain about the sale here in question, but there is no evidence that anyone objected to it.

The Commissioner has provided in article 22 (a)-1 of Regulations 94 that, if property is transferred by a corporation to a shareholder for an amount substantially less than its fair market value, the shareholder shall include in gross income the difference between the amount paid for the property and the amount of its fair market value. The case of Timberlake v. Commissioner, 132 Fed. (2d) 259, affirming 46 B. T. A. 1082,1945 U.S. Tax Ct. LEXIS 23">*37 is in point. There four persons owned all of the stock of a corporation. The corporation sold to them certain property substantially in proportion to their stockholdings at a price which was less than the fair market value. The court, in affirming the Board of Tax Appeals, said that the excess of value over the purchase price was taxable income to the stockholders under the statutes and regulations. It accepted the regulations in force in 1936 as a correct interpretation of the statutes and regarded as of no importance the fact that the transfer took the form of a sale in the absence of an express declaration of a dividend. It stated:

The substance of the transaction determines its character for purposes of taxation; and we need only inquire whether the Columbia corporation transferred to the taxpayer and its other stockholders without cost a part of its earnings and profits so that they were severed from and ceased to be a part of the corporate property in which the stockholders had an indirect undivided interest and became their separate and independent holding, of which they could dispose at will.

Here, Young-Wolf Corporation, the sole stockholder of the selling corporation, 1945 U.S. Tax Ct. LEXIS 23">*38 Gary Theatre Co., in turn made a disposition, all as a part of the same transaction. That is, it did not receive the benefits of the transfer directly into its own hands, but caused them to be received by its nominees. Those nominees were tools of its two controlling stockholders just created by Young and Wolf a few days previously. 5 T.C. 1251">*1257 We have already held that four of those trusts are not to be distinguished from Young for income tax purposes. The Supreme Court, in Palmer v. Commissioner, 302 U.S. 63">302 U.S. 63, said that a sale for less than full value may be as effective a means of distributing profits among stockholders as the formal declaration of a dividend and may be taxable to the extent that the value of the distributed property exceeds the amount received.

Clearly, the effect of the sales here in question was to distribute the accumulated earnings and profits of Gary Theatre Co. to persons chosen by or on behalf of its stockholder, and such must have been the intent of Young and Wolf who brought it about. If the sale had been to Young-Wolf Corporation, the two cases just cited would be directly in point. This case differs from those 1945 U.S. Tax Ct. LEXIS 23">*39 cases only in that here the sale was not to Young-Wolf Corporation, the stockholder of the distributing company, but to the controlling stockholders of Young-Wolf Corporation. These trusts must be considered as having been selected by Young-Wolf Corporation for the purpose of distributing the property of Gary Theatre Co. The rule enunciated in 302 U.S. 63">Palmer v. Commissioner, supra, and Timberlake v. Commissioner, supra, can not be circumvented by introducing this additional step. Cf. Helvering v. Horst, 311 U.S. 112">311 U.S. 112. It is not fatal to the Commissioner's contention that the dividend did not physically pass through Young-Wolf Corporation into the hands of its stockholders. Cf. Lucas v. Earl, 281 U.S. 111">281 U.S. 111; United States v. Joliet & Chicago R. Co., 315 U.S. 44">315 U.S. 44. The Commissioner did not err in holding that Young-Wolf Corporation constructively received some taxable income as a result of the transfer for less than the value of the securities and that the trusts likewise received some income which is taxable to Young.

The parties have stipulated 1945 U.S. Tax Ct. LEXIS 23">*40 facts from which it appears that the earnings and profits of Gary Theatre Co. available for the distribution of a taxable dividend on December 31, 1937, amounted to a little over $ 75,000. They do not show what the figure was on November 9, 1937. The Commissioner argues that Gary Theatre Co. realized an additional profit from the distribution of the stock of Theatrical Managers, Inc. He concedes that Commissioner v. Timken, 141 Fed. (2d) 625, affirming 47 B.T.A. 494">47 B. T. A. 494, holds to the contrary, but he argues that that case was incorrectly decided. The transaction itself did not give rise to any earnings or profits on the part of Gary Theatre Co. Commissioner v. Timkin, supra; General Utilities & Operating Co. v. Helvering, 296 U.S. 200">296 U.S. 200. Thus, the transfer could not represent a taxable dividend in excess of the earnings of Gary Theatre Co. available at the time of the distribution. An additional part would represent a return of capital to Young-Wolf Corporation, offsetting in part the larger cost 5 T.C. 1251">*1258 to it of the Gary Theatre Co. stock. The parties should be able to agree 1945 U.S. Tax Ct. LEXIS 23">*41 upon the amount of earnings available on November 9, 1937, but, if they can not, then we shall have to take the earnings available at the end of the year. Cohan v. Commissioner, 39 Fed. (2d) 540.

The Commissioner, in his notice of deficiency to Young, explained that Young had received the dividend in question from Young-Wolf Corporation. A distribution by Young-Wolf Corporation would be taxable to the extent of the earnings of that corporation available for the distribution of a taxable dividend at the time of the distribution. The Commissioner has never contended that Young-Wolf Corporation, by the transaction here in question, distributed earnings which it had accumulated from other sources. The evidence shows that it had a deficit at the end of November 1937. It distributed its current income to its preferred stockholders. We would not feel justified in holding, under the circumstances of this case, that the amount received by Young as a taxable dividend was any more than one-half of the amount which we have held that Young-Wolf Corporation, now Gary Theatre Corporation, received as a dividend. The additional amount which he received may1945 U.S. Tax Ct. LEXIS 23">*42 properly offset the cost to him of his Young-Wolf Corporation stock. The Commissioner does not contend that he has realized any gain in that connection.

The statutory period of limitation for assessment and collection of the deficiencies determined against Gary Theatre Corporation, the successor to Young-Wolf Corporation, provided in section 275 (a) of the Revenue Act of 1936, had expired prior to the mailing of the deficiency notice. The parties agree, however, that if an amount was omitted from the gross income as shown on the return which exceeds 25 percent of the amount of gross income shown on the return, then the notice of deficiency was timely under section 275 (c). It is clear from the stipulated facts that the amount which is to be included in the income of Young-Wolf Corporation for the year in question is considerably more than 25 percent of the gross income shown on its return. Therefore, the statute of limitations had not run when the notice of deficiency was mailed. Gary Theatre Corporation concedes that it is a transferee of the assets of Young-Wolf Corporation. The only remaining issue is whether the 5 percent addition for delinquency in filing the personal holding1945 U.S. Tax Ct. LEXIS 23">*43 company return was properly imposed. It is conceded that the return was delinquently filed and the record does not show that the late filing was due to reasonable cause and not to willful neglect. A 5 percent addition is therefore proper under section 291 of the Revenue Act of 1936.

Decision will be entered under Rule 50.

5 T.C. 1251">*1259 Kern, J., dissenting: I respectfully dissent from that part of the majority opinion which holds that the so-called sales of Theatrical Managers, Inc., stock by Gary Theatre Co. to the trusts created by Young and Wolf were not only dividends constructively paid by Gary Theatre Co. to Young-Wolf Corporation, but also constituted dividends constructively paid by Young-Wolf Corporation to its controlling stockholders.

I agree with the majority opinion that the "trusts must be considered as having been selected by Young-Wolf Corporation for the purpose of distributing the property of Gary Theatre Co." and that the rule enunciated in Palmer v. Commissioner, 303 U.S. 63">303 U.S. 63, and Timberlake v. Commissioner, 132 Fed. (2d) 259, can not be circumvented by reason of the1945 U.S. Tax Ct. LEXIS 23">*44 stockholder of the distributing corporation causing the distribution to be made to its nominees rather than to itself. Therefore I agree with the majority that Young-Wolf Corporation must be considered as having constructively received the dividend effected by the so-called sales of stock made by Gary Theatre Co. to the trusts.

However, it is my opinion, contrary to that of the majority, that Young-Wolf Corporation can not be considered as having constructively declared a dividend itself of the dividend which it constructively received when it directed or authorized the so-called sales to trusts created by its own stockholders, and that its own stockholders can not be considered as having constructively received from it a dividend which it originally constructively received by reason of the actual receipt of the dividend in question by the trusts created by these same stockholders.

Where Mr. A and Mr. B own in equal proportions the stock of the X Co., which, in turn, owns all of the stock of Y Co., and at a stockholders' meeting of Y it is resolved that Y sell certain of its property at far less than market value to A and B in equal proportions, and this is done, it might be considered1945 U.S. Tax Ct. LEXIS 23">*45 that A and B have received a taxable dividend by ignoring the corporate entity of X and considering A and B as, in reality, the stockholders of Y to whom Y has distributed a dividend; or it might be considered that A and B have received the dividend effected by the sales as the nominees of X, so that X is to be treated as having constructively received a taxable dividend, in which case the corporate entity of X will not be ignored; but I am unable to agree with the majority that one actual receipt of property as a result of a so-called sale can be the basis of two different consecutive constructively received dividends.

I would, therefore, conclude contrary to the majority that, while Young-Wolf Corporation received a dividend from the Gary Theatre Co. as a result of the so-called sales by the latter company to the trusts created by petitioner Young and Wolf, this was the only dividend received or paid in the transaction involved in this proceeding.

5 T.C. 1251">*1260 Opper, J., dissenting in part: My disagreement with the majority opinion is limited to the issue relating to the amount of earnings available for dividends. The computation of earnings for dividend purposes and of taxable1945 U.S. Tax Ct. LEXIS 23">*46 income do not necessarily coincide. See Commissioner v. Wheeler, 324 U.S. 542">324 U.S. 542. General Utilities & Operating Co. v. Helvering, 296 U.S. 200">296 U.S. 200, decided only that a dividend declared in property did not create taxable income of the declaring corporation. It by no means follows, as the prevailing opinion assumes, that this means there were no earnings and profits available for the declaration of a dividend for purposes of determining the taxability of the stockholder-recipient.

If there were greater doubt as to this proposition, it would have to be dispelled by the Tax Court's recent opinion in R. D. Merrill Co., 4 T.C. 955, where the distribution of property which had decreased in value was given the effect of establishing a reduction in earnings and profits measured by the difference between original cost and decreased market value; although it seems clear that the distribution was not a taxable event, and could not result in the realization of a loss for income tax purposes. First Savings Bank of Ogden v. Burnet (App. D. C.), 53 Fed. (2d) 919; see1945 U.S. Tax Ct. LEXIS 23">*47 General Securities Co. v. Commissioner (C. C. A., 10th Cir.), 123 Fed. (2d) 192. With the possible inconsistency in permitting a corporation to decrease earnings and profits by distributing an asset which has decreased in value, as in the Merrill case, and refusing to permit the respondent to increase earnings and profits where the value of a like asset has increased, as in the Timken case, infra, we are not presently concerned. ¹ What seems manifest is that income tax effects as adjudicated in the General Utilities case and the effect on earnings and profits are not at all comparable.

The assumption that there were no earnings to cover the increase in value seems to me inadmissible in the present case for at least two reasons. In the first place the record indicates that the property in question was purchased from earnings. Certainly, if the dividend stock represented an investment1945 U.S. Tax Ct. LEXIS 23">*48 of capital, petitioner, upon whom the burden lay, has failed to show it. Accordingly, the increment in value is not an increase of capital, but is itself an additional earning. Commissioner v. Wakefield (C.C.A., 6th Cir.), 139 Fed. (2d) 280. See also Binzel v. Commissioner (C.C.A., 2d Cir.), 75 Fed. (2d) 989; certiorari denied, 296 U.S. 579">296 U.S. 579. In Estate of H. H. Timken, 47 B.T.A. 494">47 B.T.A. 494; affd. (C.C.A., 6th Cir.), 141 Fed. (2d) 625, the asset distributed was part of the corporation's original capital and did not represent the investment of earnings.

5 T.C. 1251">*1261 In the second place, we are dealing here not with an outright property distribution, but with a bargain sale. The doctrine of Palmer v. Commissioner, 302 U.S. 63">302 U.S. 63, upon which the main proposition in this proceeding rests, calls for treatment of a bargain sale as a dividend only where there appears an intention to invade the net worth of the corporation for the benefit of the stockholders. "For a sale to stockholders may not result in any diminution1945 U.S. Tax Ct. LEXIS 23">*49 of its net worth and in that case can not result in any distribution of its profits." But in order for a sale at cost to work a decrease of net worth, increment, which is all that is distributed, must first be considered on the asset side. Since, in this case, it is clear that it never became capital, it must have been a part of earnings.

Assume, for example, that a corporation's accumulated earnings of $ 10,000 are used to purchase an investment which in the following year becomes worth $ 20,000. This is now "sold" to the stockholders for the original cost of $ 10,000. Clearly, under the Palmer case, the $ 10,000 of increment would then be taxable as a dividend. "* * * the increment of value represented by the difference between the purchase price of the stock paid by the corporation in 1928 and its value in 1936, when it was sold at cost to the stockholders, was transferred by the corporation to them * * *." Timberlake v. Commissioner (C.C.A., 4th Cir.), 132 Fed. (2d) 259, 261. Now, however, the corporation still has in its possession $ 10,000 in cash which can not be considered as anything but a replacement of the fund originally invested. 1945 U.S. Tax Ct. LEXIS 23">*50 Since the latter was earnings and profits, in the first place, it is hard to see that the cash which replaces it does not remain earnings and profits.

Considering that it was the increment in value which constituted the dividend, it seems to me inescapable that the earnings and profits embraced that increment, as well as the original investment which was not wiped out but remained to be distributed. It follows that at least under the present facts there must have been earnings and profits of the declaring corporations sufficient to constitute the entire distribution a dividend.