United States Supreme Court Cases & Opinions

U.S. Supreme Court

Higgins v. Commissioner, 312 U.S. 212 (1941)

Higgins v. Commissioner

No. 253

Argued January 10, 13, 1941

Decided February 3, 1941

312 U.S. 212

Syllabus

1. Salaries and other expenses incident to the looking after one's own investments in bonds and stocks are not deductible under § 23(a) of the Revenue Act of 1932 as expenses paid or incurred in carrying on a "trade or business." P. 312 U. S. 214.

2. In this connection, "carrying on a business," has not been interpreted by any regulation or by rulings approved by the Secretary of the Treasury. Certain rulings of less dignity favorable to the taxpayer, made in individual cases, are not determinative. P. 312 U. S. 215.

Unless the administrative practice is long continued and substantially uniform in the Bureau and without challenge by the Government before the Board of Tax Appeals and in the courts,

Page 312 U. S. 213

it should not be assumed that Congressional reenactment of language so construed by rulings of the Board was an adoption of the construction.

3. The proposition that the management of one's own securities may be a "business" where there is sufficient extent, continuity, variety, and regularity is supported by no fixed administrative construction. P. 312 U. S. 216.

4. For the purpose of deduction, the part of the taxpayer's expense attributable to the management of his real estate business may be segregated from the part paid for the care of his bond and stock investments. P. 312 U. S. 218.

111 F.2d 795 affirmed.

Certiorari, 311 U.S. 626, to review the affirmance of a ruling of the Board of Tax Appeals, 39 B.T.A. 1005, which sustained the Commissioner's refusal to allow certain deductions in an income tax return.