Helvering v. American Dental Co., 318 U.S. 322 (1943)

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Helvering v. American Dental Co.

No. 303

Argued January 5, 6, 1943
Decided March 1, 1943
318 U.S. 322

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

1. The finding of the Board of Tax Appeals that the cancellation of indebtedness in question occurred in 1937 is accepted here. P. 324.

2. The term "gift" in § 22(b)(3) of the Revenue Act of 1936 denotes the receipt of financial advantages gratuitously. P. 330.

3. A cancellation of items of indebtedness owed by a corporation (rent and interest on notes), though the items had been accrued and served to offset income in prior years, and though the corporation was solvent, held, under § 22(b)(3) of the Revenue Act of 1936, a "gift" exempt from federal income tax. P. 330.

4. A finding of the Board of Tax Appeals that the debt cancellation in question was not a "gift" within the meaning of § 22(b)(3) of the Revenue Act of 1936 is not conclusive here, because the Board reached its conclusion by application of erroneous legal standards. P. 330.

5. That the motives for cancellation of indebtedness were those of business, or even selfish, is of no significance in determining whether there was a "gift" under § 22(b)(3). P. 331.

128 F.2d 254 affirmed.

Certiorari, 317 U.S. 612, to review the reversal of a decision of the Board of Tax Appeals, 44 B.T.A. 425, sustaining a determination of deficiency in income tax.