United States Supreme Court Cases & Opinions

U.S. Supreme Court

Commissioner v. Gillette Motor Transport, Inc., 364 U.S. 130 (1960)

Commissioner v. Gillette Motor Transport, Inc.

No. 359

Argued April 21, 1960

Decided June 27, 1960

364 U.S. 130

Syllabus

Respondent trucking company ceased operations during World War II because of a strike, and the Director of the Office of Defense Transportation took possession and assumed control of its business but left title to its properties in respondent, which resumed normal operations and functioned under the control of a federal manager until termination of possession and control by the Government. The Motor Carrier Claims Commission determined that, by assuming possession and control of respondent's facilities, the Government had deprived it of the right to determine freely what use was to be made of them, and it awarded to respondent as compensation a sum representing the fair rental value of its facilities during the period of government control.

Held: under the Internal Revenue Code of 1939, this award constituted ordinary income, and not a capital gain resulting from an "involuntary conversion" of respondent's capital assets consisting of real or depreciable personal property used in its trade or business, within the meaning of §117(j). Pp. 364 U. S. 130-136.

265 F.2d 648, reversed.