UNITED STATES SUPREME COURT DECISIONS ON-LINE

In determining the applicability of § 533(a) of the Internal Revenue Code of 1954 -- which provides a rebuttable presumption that a corporation that has accumulated earnings "beyond the reasonable needs of the business" did so with "the purpose to avoid the income tax with respect to shareholders" -- listed and readily marketable securities owned by the corporation and purchased out of its earnings and profits are to be taken into account not at their cost to the corporation, but at their net liquidation value. Pp. 422 U. S. 624-635.

493 F.2d 426, affirmed.

BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C.J.,and BRENNAN, WHITE, MARSHALL, and REHNQUIST, JJ., joined. POWELL, J., filed a dissenting opinion, in which DOUGLAS and STEWART, JJ., joined, post, p. 422 U. S. 635.