Opinion · Supreme Court of the United States

Electro-Chemical Engraving Co. v. Commissioner

Electro-Chemical Engraving Co. v. Comm’r, 311 U.S. 513 (1941)

Type
Opinion
Court
Supreme Court of the United States
Jurisdiction
Federal
Date
1941-01-06
Topic
general

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.

Citator

UpLaw has not yet analyzed Electro-Chemical Engraving Co. v. Commissioner. The absence of a flag is not a finding that it is good law.

Cited by
58 opinions

Headnotes

  1. Tax Law — Deductibility of Losses from Foreclosure Sales A loss sustained by a corporation upon the foreclosure sale of its mortgaged property, acquired for profit, is a loss from a "sale" of a capital asset and is therefore deductible in computing taxable income under the Revenue Act of 1934 only to the limited extent allowed by §§ 23(j) and 117(d) for losses from sales or exchanges of capital assets, rather than in full from gross income. 311 U.S. at 514
ELECTRO-CHEMICAL CO.v. COMM'R,311 U.S. 513(1941)
61 S.Ct. 372
ELECTRO-CHEMICAL ENGRAVING CO., INC.v. COMMISSIONER OF INTERNAL REVENUE.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT.
No. 62.
Argued December 12, 1940.
Decided January 6, 1941.
A loss sustained by a corporation upon foreclosure sale of its mortgaged property,held, in computing taxable income under the Revenue Act of 1934, deductible only to the limited extent allowed by §§ 23(j) and 117(d) for losses from "sales" or exchanges of capital assets.Helveringv.Hammel, ante, p. 504, followed. P. 514.110 F.2d 614, affirmed.
CERTIORARI,310 U.S. 622, to review the reversal of a decision
of the Board of Tax Appeals redetermining a deficiency in income
tax.
Mr. George P. Halperin, with whomMr. Bernard S. Barronwas on the brief, for petitioner.Mr. Norman D. Keller, with whomSolicitor General Biddle,Assistant Attorney General Clark, andMr. Sewall Keywere on the brief, for respondent.
MR. JUSTICE STONE delivered the opinion of the Court.
This is a companion case toHelveringv.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 theHammelcase which are made applicable to petitioner, a corporation, by § 23(f)(j).Page 514

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 theHammelcase,108 F.2d 753. For the reasons stated in our opinion in theHammelcase we think that this case was rightly decided below.Affirmed.

MR. JUSTICE ROBERTS dissents.