HASSO v. HASSO
Where corporation's distributions to shareholders in connection with a single transaction were less than 20 percent of the corporation's gross assets, those distributions did not constitute a "partial liquidation" of the corporation, so general rule that distributions by a corporation to a shareholder that is a trust are allocated as trust income applies. Parent corporation's advice to shareholders that a subsidiary was selling certain stock and intended to divest itself of specified tangible property, and make distributions to its shareholders, including parent corporation, did not constitute an indication by parent corporation that it was partially liquidating, so resulting distributions to trust were properly allocated as income rather than as principal under the "entity" exception to the general rule. Rule that distributions to trust in exchange for stock constitute principal does not apply where distributions did not alter or reduce the trust's share ownership or its percentage ownership of corporation.
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