United States v. Kirby Lumber Co. case
brief
ANALYSIS:
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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.
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.
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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.
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