United States v. Kaplan, 304 U.S. 195 (1938)

U.S. Supreme Court

United States v. Kaplan, 304 U.S. 195 (1938) United States v. Kaplan

No. 667

Argued March 3, 4, 1938

Decided May 2, 1938

304 U.S. 195

CERTIORARI TO THE COURT OF CLAIMS

Syllabus

Decided upon the authority of Pacific National Co. v. Welch, ante, p. 304 U. S. 191.

18 F. Supp. 965 reversed.

Certiorari, 303 U.S. 629, to review a judgment in favor of the taxpayer in a suit for refund of income taxes.

MR. JUSTICE BUTLER delivered the opinion of the Court.

Respondent and his wife in a joint return of income tax for 1929 reported a profit of $194,000 from the sale of 25

Page 304 U. S. 196

shares of the stock of "No. 1100 Park Avenue," and disclosed tax of $2,084.20, which was paid. The taxable income was less than the profit in question. It resulted from the sale by him, April 11, 1929, for a net price of $240,000 of stock bought in 1928 for $46,000. The buyer agreed to pay $25,000 cash, and the balance in installments of $1,875 a month. For 1930, respondent and his wife filed a return showing no taxable income. For 1931 and 1932, respondent filed no returns. In 1932, he filed a claim for refund of the entire 1929 income tax. The ground for the claim was that he was entitled to report the sale on the installment basis. The findings indicate that the deferred payments were worth less than face value; after respondent and his wife (to whom he assigned the contract) had received $55,000, they agreed to accept $75,000 more as full payment. The Commissioner rejected the claim, and this suit followed. The Court of Claims gave respondent judgment. 18 F. Supp. 965. This Court granted a writ of certiorari because of conflict between the decision and that of the Circuit Court of Appeals for the Ninth Circuit in Pacific National Company v. Welch, 91 F.2d 590, this day affirmed, ante, p. 304 U. S. 191. The question here presented is the same as the one decided in that case. The judgment of the court below must be

Reversed.

MR. JUSTICE CARDOZO and MR. JUSTICE REED took no part in the consideration or decision of this case.