United States Supreme Court Cases & Opinions

U.S. Supreme Court

Taft v. Bowers, 278 U.S. 470 (1929)

Taft v. Bowers

Nos. 16 and 17

Argued April 26, 1928

Reargued October 9, 1928

Decided February 18, 1929

278 U.S. 470

Syllabus

1. Under par. (2), § 202 of the Revenue Act of 1921, where one who purchased shares of stock after February 28, 1913, gave them to another after December 31, 1920, when their market value had increased over the investment, and the donee afterwards sold them at a price still higher, the gain taxable to the donee is the difference between the price realized by him and the price paid by the donor. P. 278 U. S. 481.

Page 278 U. S. 471

2. In such case, Congress has power under the Sixteenth Amendment to treat the entire increase in value, when separated from the investment by the sale, as income of the donee. P. 278 U. S. 482.

20 F.2d 561, affirmed.

Certiorari, 275 U.S. 520, to judgments of the circuit court of appeals reversing judgments in favor of the present petitioners, 15 F.2d 890, in actions against the Collector to recover money paid as income taxes.

Page 278 U. S. 478