TAXATION OF C CORPORATIONS BAR transaction at the time the dividend was declared, we cannot conclude that the and since Stouffer had earnings and profits exceeding $30 million of a dividend to a part of the sales proceeds. In this case, the form distribution was merely a device designed to give the appearance entered into solely for tax reasons, and it should be recognized as Strap Corporation is the sole shareholder of X, Inc. Strap and X do mar years. Strap has a $150,000 basis in its X stock. Boot is a prospective buyer and substance of the transaction coincide; it was not a PROBLEM file a consolidated return, and Strap has held its X stock for more than and is willing to purchase all of the X stock, but he is unable to pay the $500,000 price demanded by Strap even though he believes it to be fair. I has $100,000 cash on hand and an ample supply of earnings and profits. To solve these problems, the parties have agreed on the following plan: Stran Corporation will cause X, Inc. to distribute $100,000 to it as a dividend Promptly thereafter, Strap will sell its X stock to Boot for $400,000. What are the tax consequences of this plan? What rather than a corporation? Strap were an individual structured by petitioner