Helvering v. Janney, 311 U.S. 189 (1940)

Helvering v. Janney

No. 36

Argued November 18, 1940
Decided December 9, 1940 *
311 U.S. 189

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE THIRD CIRCUIT

Syllabus

1. Under § 51(b) of the Revenue Act of 1934, when a joint return is made by husband and wife, the tax is computed on their aggregate net income, and capital losses of one spouse may be deducted from capital gains of the other. P. 194.

2. Section 117(d) of this Act did not purport to alter the rule as to the right of the spouses to deductions in their joint return, but merely limited the amount of capital losses which could be deducted. P. 194.

3. Treasury Regulations 86, Art. 117-5, in undertaking to provide that

the allowance of losses of one spouse from sales or exchanges of capital assets is in all cases to be computed without regard to gains and losses of the other spouse upon sales or exchanges of capital assets,

is inconsistent with the Act, and therefore ineffective. P. 194.

108 F.2d 564 affirmed; 111 id. 144 reversed.

Certiorari, 310 U.S. 617, to review judgments of Circuit Courts of Appeals which dealt with rulings of the Board of Tax Appeals. In No. 36, a decision of the Board, 39 B.T.A. 240, sustaining a deficiency assessment was reversed by the court below, whose judgment is affirmed here. In No. 113, a like ruling of the Board was affirmed by a judgment of the Second Circuit which this Court reverses.