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Neuberger v. Commissioner, 311 U.S. 83 (1940)

Neuberger v. Commissioner of Internal Revenue

No. 5

Argued October 16, 17, 1940

Decided November 12, 1940

311 U.S. 83


1. Under § 23(r)(1) of the Revenue Act of 1932, a taxpayer's distributive share of partnership profits derived from sales or exchanges of stocks and bonds that were not capital assets (as defined in § 101), is a "gain" to the extent of which he is entitled to a deduction of a loss sustained by him in similar transactions for his individual account. P. 311 U. S. 88.

2. That §§ 184-188 of the Revenue Act of 1932 advert to instances in which partnership income retains its identity in the individual partner's return does not, by application of the maxim expressio unius est exclusio alterius, require disallowance of the deduction here claimed. The maxim is not a rule of law, but an aid to construction, and may not override the clear intent of Congress. P. 311 U. S. 88.

3. Where the intent of Congress is plain, the scope of an Act may not be narrowed by administrative interpretation. P. 311 U. S. 89.

4. Cases variously emphasizing the character of partnerships as business units, or as associations of individuals, but not involving § 23(r)(1), are of little aid in ascertaining its meaning. P. 311 U. S. 89.

5. The findings of the Board of Tax Appeals in this case show that the allowance of a deduction of the amount claimed would not exceed the limit prescribed by § 23(r)(1). P. 311 U. S. 89.

6. The construction here given § 23(r)(1) is consistent with the legislative history of amendatory legislation, as well as that of the section itself. P. 311 U. S. 89.

7. Shearer v. Burnet, 285 U. S. 228, distinguished. P. 311 U. S. 90.

104 F.2d 649 reversed.

Page 311 U. S. 84

Certiorari, 310 U.S. 655, to review the affirmance of a decision of the Board of Tax Appeals, 37 B.T.A. 223, sustaining the determination of a deficiency in income tax.

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