Doran

The named petitioners seek reversal of eight decisions rendered by the Tax Court of the United States, in consolidated proceedings to redetermine tax deficiencies.

The question we must decide is this: Where, under the circumstances of this case, life insurance policies on the lives of corporate stockholders were issued to trustees, the premiums being paid by the corporation, and where the trustees received the proceeds of one policy and purchased stock belonging to the deceased for the surviving stockholders, did the surviving stockholders realize taxable income in the form of a corporate distribution of earnings or profit?

The material facts have been stipulated. For some time prior to 1943, and until the tax year 1947, petitioners were stockholders of Inland Motor Freight, a Washington corporation. 1 They were all actively engaged in the operation and management of Inland, and were members of its board of directors. Prior to July, 1943, there had been informal dis *935 cussions among the stockholders of Inland with respect to an arrangement whereby funds could be accumulated so that in the event of the death of a stockholder the survivors would be able to purchase the…