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McWilliams v. Commissioner

Law Dictionary

Law Dictionary

Featuring Black's Law Dictionary 2nd Ed.
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Income Tax Keyed to Freeland

Citation. McWilliams v. Comm’r, 331 U.S. 694, 67 S. Ct. 1477, 91 L. Ed. 1750, 1947 U.S. LEXIS 2989, 47-1 U.S. Tax Cas. (CCH) P9289, 35 A.F.T.R. (P-H) 1184, 1947-2 C.B. 34, 170 A.L.R. 341, 1947 P.H. P72,007 (U.S. June 16, 1947)

Brief Fact Summary. Petitioner managed his and his wife’s large estates. In so doing, he would instructed his broker to sell stock of one, and buy for the other account, in order to establish certain losses. These losses were deducted from their gross income.

Synopsis of Rule of Law. Deductions are prohibited for losses from sales or exchanges of property, directly or indirectly, between family members.

Facts. John P. McWilliams, Petitioner, managed the large independent estate of his wife and his own estate. On multiple occasions he ordered his broker to sell certain stock for one account and buy the same number of shares of the same stock for the other account. He told the broker that it was for establishing tax losses. Petitioners filed separate income tax returns and claimed the losses as deductions from gross income.

Issue. Are the losses claimed by Petitioner deductible against gross income?

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