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HELVERING V. HORST, 311 U. S. 112 (1940)

U.S. Supreme Court

Helvering v. Horst, 311 U.S. 112 (1940)

Helvering v. Horst

No. 27

Argued October 25, 1940

Decided November 25, 1940

311 U.S. 112


1. Where, in 1934 and 1935, an owner of negotiable bonds, who reported income on the cash receipts basis, detached from the bonds negotiable interest coupons before their due date and delivered them as a gift to his son, who, in the same year, collected them at maturity, held that, under § 22 of the Revenue Act of 1934, and in the year that the interest payments were made, there was a realization of income, in the amount of such payments, taxable to the donor. P. 311 U. S. 117.

2. The dominant purpose of the income tax laws is the taxation of income to those who earn or otherwise create the right to receive it and who enjoy the benefit of it when paid. P. 311 U. S. 119.

3. The tax laid by the 1934 Revenue Act upon income "derived from . . . wages or compensation for personal service, of whatever kind and in whatever form paid . . . ; also from interest . . . " cannot fairly be interpreted as not applying to income derived from interest or compensation when he who is entitled to receive it makes use of his power to dispose of it in procuring satisfactions which he would otherwise procure only by the use of the money when received. P. 311 U. S. 119.

4. This case distinguished from Blair v. Commissioner, 300 U. S. 5, and compared with Lucas v. Earl, 281 U. S. 111, and Burnet v. Leininger, 285 U. S. 136. Pp. 311 U. S. 118-120.

107 F.2d 906, reversed.

Certiorari, 309 U.S. 650, to review the reversal of an order of the Board of Tax Appeals, 39 B.T.A. 757, sustaining a determination of a deficiency in income tax.

Page 311 U. S. 114

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