Electro-Chemical Engraving Co. v. Commissioner

311 U.S. 513 (1941)

ELECTRO-CHEMICAL ENGRAVING CO., INC.
v.
COMMISSIONER OF INTERNAL REVENUE.

No. 62.

Supreme Court of United States.

Argued December 12, 1940. Decided January 6, 1941. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT.

Mr. George P. Halperin, with whom Mr. Bernard S. Barron was on the brief, for petitioner.

Mr. Norman D. Keller, with whom Solicitor General Biddle, Assistant Attorney General Clark, and Mr. Sewall Key were on the brief, for respondent.

MR. JUSTICE STONE delivered the opinion of the Court.

This is a companion case to Helvering v. Hammel, ante, p. 504.

The question is whether the loss suffered by petitioner on foreclosure sale of his mortgaged property, acquired for profit, may be deducted in full from gross income or only to the extent provided by § 117 (d) of the 1934 Revenue Act. The statutory provisions involved are those of the 1934 Act relating to capital gains or losses, particularly "losses from sales or exchanges of capital assets" considered in the Hammel case which are made applicable to petitioner, a corporation, by § 23 (f) (j).

The Board of Tax Appeals ruled that petitioner's loss was deductible in full from its ordinary income. The court of appeals for the second circuit reversed the Board, 110 F.2d 614, holding that the loss sustained by petitioner was a loss from a sale of capital assets, § 23 (j), which under § 117 (d) could be deducted from the gross income only to the extent of capital gains, plus $2,000. We granted certiorari, 310 U.S. 622, so that the case might be considered with the conflicting decision of the court of appeals for the sixth circuit in the Hammel case, 108 F.2d 753. For the reasons stated in our opinion in the Hammel case we think that this case was rightly decided below.

Affirmed.

MR. JUSTICE ROBERTS dissents.