Monday, April 29, 2013

United States v. Kirby Lumber Co. case brief

United States v. Kirby Lumber Co. case brief
284 U.S. 1, 52 S. Ct. 4;76 L. Ed. 131, 1931 U.S. 457

CASE SYNOPSIS: The United States sought certiorari review of a judgment from the United States Court of Claims, which held that respondent taxpayer did not realize a taxable gain from the purchase of its own bonds on the open market at less than their par value, which it had received when it issued them.

FACTS: The trial court held that respondent taxpayer did not realize a taxable gain from the purchase of its own bonds on the open market at less than their par value, which it had received when it issued them.

HOLDING:
Upon the petition for certiorari review by the United States, the United States Supreme Court reviewed § 213(a) of the Revenue Act of November 23, 1921, and held that gross income included gains or profits and income derived from any source whatever.

ANALYSIS:
By the Treasury Regulations authorized by statute, if a corporation purchased and retired any such bonds at a price less than the issuing price or face value, the excess of the issuing price or face value over the purchase price was income for the taxable year. The Court found no reason to disregard the regulations. There was no shrinkage of assets, and respondent made a clear gain. As a result of its dealings, respondent realized a certain sum previously offset by the obligation of bonds. Therefore, respondent realized taxable income.

CONCLUSION: The court reversed a judgment holding that respondent taxpayer did not realize a taxable gain from the purchase of its own bonds on the open market for less than it had received for them. The court concluded that respondent made a clear gain in a certain amount previously offset by the obligation of bonds.
---
Interested in learning how to get the top grades in your law school classes? Want to learn how to study smarter than your competition? Interested in transferring to a high ranked school?


No comments:

Post a Comment

The Evolution of Legal Marketing: From Billboards to Digital Leads

https://www.pexels.com/photo/coworkers-talking-outside-4427818/ Over the last couple of decades, the face of legal marketing has changed a l...