ELECTRO-CHEMICAL ENGRAVING CO., INC.
v.
COMMISSIONER OF INTERNAL REVENUE
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The Supreme Court held that a corporation's loss from the foreclosure sale of mortgaged property acquired for profit constitutes a capital loss under the 1934 Revenue Act and therefore may be deducted from gross income only to the extent of capital gains plus $2,000, rather than in full against ordinary income.
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Mr. Justice Stone delivered the opinion of the Court.
This' is a companion case to Helvering v. Hammel, ante, p. 504.
The question is whether the loss suffered by petitioner on foreclosure sale of his mortgaged property, acquired for profit, may be deducted in full from gross income or only to the extent provided by § 117 (d) of the 1934 Revenue Act. The statutory provisions involved are those of the 1934 Act relating to capital gains or losses, particularly “losses from sales or exchanges of capital assets” considered in the Hamrnel case which are made applicable to petitioner, a corporation, by § 23 (f) (j). The Board of Tax Appeals ruled that petitioner’s.loss was deductible in full from its ordinary income. The court of appeals for the second circuit reversed the Board;-110 F. 2d 614, holding that the loss sustained by petitioner was a loss from a sale of capital assets, § 23 (j), which under § 117 (d) could be deducted from the gross income only to the extent of capital gains, plus $2,000. We . granted certiorari, 310 U. S. 622, so that the case might be considered with the conflicting decision of the court of appeals for the sixth circuit in the Hammel case, 108 F' 2d 753. For the reasons stated in our opinion "in the Hammel case we think that this case was rightly decided below.
Affirmed.
Mr. Justice Roberts dissents.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
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Dobson v. Commissioner of Internal Revenue, 321 U.S. 231 (U.S. 1944)…change” of a capital asset-in the accepted meaning of those terms. Cf. Helvering v. Flaccus Leather Co., 313 U. S. 247; Fairbanks v. United States, 306 U. S. 436. In Helvering v. Hammel, 311 U. S. 504; Electro-Chemical Engraving Co. v. Commissioner, 311 U. S. 513; Helvering v. Nebraska Bridge Supply & Lumber Co., 312 U. S. 666, on which petitioners rely, we held as matter of law that losses resulting from a sale were not to be denied the benefits of the capital losses provisions because the sale was a forced…
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United States v. Armature Rewinding Co., 124 F.2d 589 (8th Cir. 1942)…ridge Supply & Lumber Co., 8 Cir., 115 F. 2d 288, reversed per curiam, 312 U.S. 666, 61 S.Ct. 827, 85 L.Ed. 1111 with Helvering v. Hammel, 311 U.S. 504, 61 S.Ct. 368, 85 L.Ed. 303, 131 A.L.R. 1481, and Electro-Chemical Engraving Co. v. Commissioner, 311 U.S. 513, 61 S.Ct. 372, 85 L.Ed. 308. Compare, also, United States v. Stewart, 311 U.S. 60, 61 S.Ct. 102, 85 L.Ed. 40, with Stewart v. United States, 9 Cir., 106 F. 2d 405, and with Stern Bros. & Co. v. Commissioner, 8 Cir., 108 F. 2d 309. Congress in 1941…
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Hawaiian GAS Prods. v. Commissioner of Internal Revenue, 126 F.2d 4 (9th Cir. 1942)…Hammel, 311 U.S. 504, 511, 61 S.Ct. 368, 372, 85 L.Ed. 303, 131 A.L.R. 1481. In Commissioner v. Coggan, 1 Cir., 119 F. 2d 504, 507, it was said that, under the authority of the Hammcl case, supra, and Electro-Chemical Engraving Co. v. Commissioner, 311 U.S. 513, 61 S.Ct. 372, 85 L.Ed. 308, “the sale need not be by voluntary action of the taxpayer in order to be a ‘sale or exchange’ within the meaning of § 117.” See also Commissioner v. Peterman, 9 Cir., 118 F. 2d 973. “A sale,” said the Supreme Court in t…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Commissioner of Internal Revenue v. Hammel et ux., 108 F.2d 753 (6th Cir. 1940)
- Commissioner of Internal Revenue v. Electro-Chemical Engraving Co., Inc., 110 F.2d 614 (2d Cir. 1940)
- Reconstr. Fin. Corp. v. Prudence Sec. Advisory Grp., 310 U.S. 622 (U.S. 1940)
- Gorin v. United States, 310 U.S. 622 (U.S. 1940)