TAXATION--INCOME TAX--NONDEDUCTIBLE LOSSES--INTRA-FAMILY TRANSACTIONS

Authors

Bayard E. Heath S.Ed., University of Michigan Law SchoolFollow

Abstract

Petitioner managed his wife's as well as his own estate. On several occasions, to establish tax losses, he ordered his broker to sell certain stock on the Stock Exchange for his account, and then to buy the same number of shares of the same stock for his wife's account. Petitioner claimed losses derived from these sales when filing his income tax return, but the commissioner disallowed these deductions on the authority of section 24 (b) of the Internal Revenue Code. On the taxpayer's application to the Tax Court, it held section 24 (b) inapplicable. The circuit court of appeals reversed the Tax Court, and the Supreme Court granted certiorari. Held, affirmed. The purpose of 24 (b) was to put an end to the privilege of taxpayers, by intra-family transfer, to choose their own time for realizing tax losses on investments which for most practical purposes they continue to own. McWilliams v. Commissioner of Internal Revenue, (U.S. 1947) 67 S, Ct. 1477.

Recommended Citation

Bayard E. Heath S.Ed., TAXATION--INCOME TAX--NONDEDUCTIBLE LOSSES--INTRA-FAMILY TRANSACTIONS, 46 Mich. L. Rev. 574 (1948).
Available at: https://repository.law.umich.edu/mlr/vol46/iss4/18