Sunday, May 12, 2013

McWilliams v. Commissioner case brief

 McWilliams v. Commissioner case brief
331 U.S. 694, 67 S. Ct. 1477, 91 L. Ed. 1750, 1947 U.S.

CASE SYNOPSIS: Petitioner taxpayers sought a writ of certiorari to review the judgment of the United States Court of Appeals for the Sixth Circuit, which reversed an order expunging deficiency assessments, pursuant to § 24(b) of the Internal Revenue Code, for losses realized from indirect intra-family transfers of stock.

FACTS: Petitioner taxpayers, who were husband and wife, had on several occasions engaged in stock transactions where one would sell certain stock to an unknown buyer and the other would promptly buy the same amount of the same stock at the same price from an unknown seller. Petitioners filed separate income tax returns and claimed the losses sustained on the sales as deductions from gross income. The Commissioner of Internal Revenue (commissioner) disallowed the deductions under § 24(b) of the Internal Revenue Code, I.R.C. § 24(b), as losses on sales between family members. The tax court expunged the commissioner's deficiency assessments. The court of appeals reversed. Petitioners sought a writ of certiorari. The Court granted the petition and affirmed, holding that the transactions were within the absolute prohibition of § 24(b) against allowance of losses on sales, even indirect ones, between family members.

CONCLUSION: The Court granted the petition and affirmed, holding that the transactions were within the absolute prohibition against the allowance of losses on sales, even indirect ones, between family members.
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