Heinz v. Commissioner of Internal Revenue

Full title: HEINZ v. COMMISSIONER OF INTERNAL REVENUE. COMMISSIONER OF INTERNAL…

Court: Circuit Court of Appeals, Third Circuit

Date published: Jan 30, 1939

101 F.2d 453 (3d Cir. 1939)

Opinion

Nos. 6427-6429.

January 30, 1939.

Appeal from United States Board of Tax Appeals.

On petitions for rehearing.

Order of Board of Tax Appeals reversed, and cause remanded, with directions.

For former opinion, see 94 F.2d 832.

Oscar P. Mast, of Washington, D.C. (Bright, Thompson Mast, of Washington, D.C., of counsel), for taxpayer.

James W. Morris, Asst. Atty. Gen., and Sewall Key and Harry Marselli, Sp. Assts. to Atty. Gen., for Commissioner.

Before DAVIS and THOMPSON, Circuit Judges, and DICKINSON, District Judge.

PER CURIAM.

These appeals were disposed of in an opinion filed by this court on February 11, 1938 (3 Cir., 94 F.2d 832) but thereafter petitions for rehearing were filed by both parties which are denied except as herein considered.

The first question involved is whether a certain loss sustained by the taxpayer in 1931 was an ordinary loss, as was held by the Board of Tax Appeals, or whether it was a capital loss as contended by the Commissioner.

Upon reexamination of the statutes and decisions touching this question, we are convinced that the Board reached the correct conclusion, and, for the reasons stated in our prior opinion, the redetermination of the Board on this question is affirmed.

The second question is whether the deduction for charitable gifts allowed by the statute, Revenue Acts 1928, 1932, § 23(n), 26 U.S.C.A. § 23( o), is measured by taking 15% of the taxpayer's net income after all capital losses have been deducted, as the Board held, or whether it is measured by taking 15% of the taxpayer's net income computed without regard to capital losses, as the taxpayer contends.

Since filing our opinion in this case the United States Supreme Court has determined this question in accordance with the taxpayer's contention. United States v. Frederick Pleasants, 59 S.Ct. 281, 83 L. Ed. ___, decided January 3, 1939.

Therefore, the order of the Board of Tax Appeals on this question is reversed, and the cause is remanded to it to redetermine the tax on this point in accordance with the opinion in the Pleasants Case.