United States Supreme Court Cases & Opinions

U.S. Supreme Court

Higgins v. Smith, 308 U.S. 473 (1940)

Higgins v. Smith

No. 146

Argued December 5, 1939

Decided January 8, 1940

308 U.S. 473

Syllabus

1. Under § 23(e) of the Revenue Act of 1932, authorizing in the computation of income tax deductions for losses sustained during the taxable year, no deductible loss occurs upon a sale by the taxpayer to a corporation wholly owned by him. P. 308 U. S. 476.

2. The contention that this conclusion is inconsistent with prior interpretations of the income tax laws and unfair to the taxpayer examined and rejected. P. 308 U. S. 478.

3. From the fact that § 24(a)(6) of the Revenue Act of 1934 provides explicitly that losses determined by sales to corporations controlled by the taxpayer are not deductible, it does not follow that the law formerly was otherwise. P. 308 U. S. 479.

4. Claims of error prejudicial to the taxpayer, arising out of the District Court's rulings on evidence in this case, held without merit. P. 308 U. S. 480.

102 F.2d 456 reversed.

Certiorari, post, p. 536, to review the reversal, on cross-appeals, of a judgment in a suit brought by a taxpayer for refund of a sum paid as income taxes.