Supreme Court of the United States, 1931

United States v. Kirby Lumber Co

Supreme Court of the United States · Decided November 2, 1931 · Holmes

284 U.S. 1; 52 S. Ct. 4; 76 L. Ed. 131; 1931 U.S. LEXIS 457 (United States Reports)

Counsel

Assistant Attorney General Rugg, with whom Solicitor General Thacher and Messrs. Fred K. Dyar, Bradley B. Gilman, Erwin N. Griswold, Paul D. Miller, Clarence M. Cbarest, and T. H. Lewis, Jr., were on the brief, for the United States., Mr. Robert Ash for respondent.

Cases that cite this one

389 later published cases cite this decision. The 25 that cite it most often are listed here.

United States Steel Corporation, and Affiliated Companies v. The United States (Fed. Cir. 1988)
Preslar v. Commissioner (10th Cir. 1999)
Dudley B. Merkel Ladonna K. Merkel David A. Hepburn, and Nancy J. Hepburn v. Commissioner of Internal Revenue (9th Cir. 1999)
Zarin v. Commissioner (United States Tax Court 1989)
John F. Tufts and Mary A. Tufts v. Commissioner of Internal Revenue (5th Cir. 1981)
John A. Gillin v. The United States (Court of Claims 1970)
Commissioner of Int. Rev. v. Coastwise Transp. Corp. (1st Cir. 1934)
United States Steel Corp. v. United States (Court of Claims 1986)
Nelson v. Commissioner (United States Tax Court 1998)
Centennial Savings Bank FSB v. United States (District Court, N.D. Texas 1988)
Coast Counties Gas & Electric Co. v. Commissioner (United States Board of Tax Appeals 1936)
Houston Natural Gas Corp. v. Commissioner of Internal Revenue (5th Cir. 1949)
Commissioner of Int. Rev. v. Pittsburgh & WV Ry. Co. (3d Cir. 1949)
Fifth Avenue-Fourteenth Street Corp. v. Commissioner of Internal Revenue (2d Cir. 1945)
Mallinckrodt v. Commissioner (United States Board of Tax Appeals 1938)
Estate of Michael Newman, Deceased, Sidney Newman, and Alice Newman, and Alice Newman v. Commissioner of Internal Revenue (2d Cir. 1991)
Frank v. United States (District Court, E.D. Pennsylvania 1942)
Helvering v. Jane Holding Corporation (8th Cir. 1940)
Lakeland Grocery Co. v. Commissioner (United States Board of Tax Appeals 1937)
Roderick E. Carlson and Jeanette S. Carlson v. Commissioner (United States Tax Court 2001)
Bressi v. Commissioner (United States Tax Court 1991)
David & Louise Zarin v. Commissioner of Internal Revenue. Appeal of David Zarin and Louise Zarin (3d Cir. 1990)
In re Sonner (United States Bankruptcy Court, E.D. Virginia 1985)
Henry L. And Frances O. Hills v. Commissioner of Internal Revenue (11th Cir. 1982)
Putoma Corp. v. Commissioner (United States Tax Court 1976)

This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.

Opinion

*2 Mr. Justice Holmes

delivered the opinion of the Court.

In July, 1923, the plaintiff, the Kirby Lumber Company, issued its own bonds for $1-2,126,800 for which it received their par value. Later in the same year it purchased in the open market some of the same bonds at less than par, the difference of price being $137,521.30. The. question is whether this difference is a taxable gain or income of the plaintiff for the year 1923, By the Rev *3 enue Act of (November 23,) 1921, c. 136, § 213 (a) gross income includes, “ gains or profits and income derived from any source whatever,” and by the Treasury Regulations authorized, by § 1303, that have been in force through repeated reenactments, “ If the corporation purchases and retires any of 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 is. gain or income for the taxable year.” Article 545 (1) (c) of Regulations 62, under Revenue Act of 1921. See Article 544 (1) (c) of Regulations 45, under Revenue Act of 1918; .Article 545 (1) (c) of Regulations 65, under Revenue Act of 1924; Article 545 (1) (c) of Regulations 69, under Revenue Act of 1926; Article 68 (1) (c) of Regulations 74, under Revenue Act of 1928. We see no reason why the Regulations should not be accepted as a correct statement of the law.

In Bowers v. Kerbaugh-Empire Co., 271 U. S. 170, the defendant in error owned the stock of another company that had borrowed money repayable in marks or their equivalent for an enterprise that failed. At the time of payment the marks had fallen in value, which so.far as it went was a gain for the defendant in error, and it was contended by the plaintiff in error that the gain was taxable income. But the transaction as a whole was a loss, and the contention ■ was denied. Here there was no shrinkage of assets and the taxpayer made a clear gain. As a result of its dealings it made available $137,521.30 assets previously offset by the obligation of bonds now extinct. We see nothing to be gained by the discussion of judicial definitions. The defendant in error has realized within the year an accession to income,-if we take words in their plain popular, meaning, as they should be -taken here. Burnet v. Sanford & Brooks Co., 282 U. S. 359, 364.

Judgment reversed.

Case-law data current through December 31, 2025. Source: CourtListener bulk data.