Burnet v. Houston,
283 U.S. 223 (1931)

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U.S. Supreme Court

Burnet v. Houston, 283 U.S. 223 (1931)

Burnet v. Houston


Argued March 12, 1931

Decided April 13, 1931

283 U.S. 223


1. In the reorganization of a trust company in receivership, it was agreed that directors of the company who subscribed to a fund for administering and liquidating certain collateral should have an interest in what might be realized in excess of a value guaranteed to the company. Held, that such an interest is "property." P. 283 U. S. 226.

2. Under §§ 21(a)(5) and 202(a)(1) of the Revenue Act of 1918, where a property interest acquired before March 1, 1913, in a transaction entered into for profit is sold in the taxable year at a loss, the loss deductible is limited by the value of the property on March 1, 1913, if that is less than original cost. P. 283 U. S. 227.

3. A taxpayer claiming such deduction must prove, by the best available evidence that the circumstances and nature of the transaction permit, the value of the property as of March 1, 1913, as well as its cost. Id.

4. If proof of value as of March 1, 1913, be impossible, the claim of a deduction cannot be allowed upon a consideration of the other factors of the statute. P. 283 U. S. 228.

5. It may not be presumed that cost of property acquired in 1906 was its value in 1913, where non constat that the cost was the value even at the time of acquisition. Id.

39 F.2d 351 reversed.

Certiorari, 282 U.S. 820, to review a judgment which reversed a decision of the Board of Tax Appeals, 13 B.T.A. 279, sustaining disallowance of a deduction for a loss in an income tax return.

Page 283 U. S. 224

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