Personal strongHolding Companiesstrong and Gross Income.pdfVIP

Cleveland State University EngagedScholarship@CSU Cleveland State Law R eview Law Journals 1953 Personal Holding Companies and Gross Income Harvey Mahlig Follow this and additional works at : http://engagedscholarship. /clevstlrev Part of the Corporation and Enterprise Law Commons, and the Tax ation-Federal In ome Commons Re ommended Citation Note, Personal Holding Companies and Gross In ome, 2 Clev.-Marshall L. Rev. 113 (1953) This Note is brought to you for free and open a ess by the Law Journals at EngagedScholarship@CSU. It has been a epted for inclusion in Cleveland State Law R eview by an authorized administrator of EngagedScholarship@CSU. For more information, please ontact library.es@ . NOTE PERSONAL HOLDING COMPANIES AND GROSS INCOME by Harvey Mahlig* HE INCORPORATED POCKETBOOK, prevalent in the 19 2 0s and early 1930s, was a device whereby a man could shift income from the high personal surtax rates to the then very low cor- poration income tax rates. He would form a corporation and transfer thereto his holdings in various income producing prop- erties, receiving all of the stock of the corporation in exchange therefor.1 Income from the transferred property would be taxed at the low corporate rates. Unless dividends were paid, the in- come would not be subject to personal surtax and could be accumulated as surplus of the corporation. Although the Govern- ment was provided with a weapon 2 to prevent the improper ac- cu