The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1921-03-30
WINS
THREE VICTORIES
Supreme Court Interpretation of
= Word 'Ineome"-for Assessment
of Taxes Of Farreaehing
Importance-An Appeal
From Chicago.

sweeping victories were won by the
government today in the supreme
court Interpretation of the term "in.
come" for the assessment of taxes
under the income and excess profits
act.
The court held that any gain de-
rived from corporate securities or
corporate assets and any increase in
the value of capital investment,
when realized, is taxable as income.
In, each case the opinion was in
dorsed by the entire court.
Solicitor General Frierson, who
was present to hear the opinions
read, interpreted them as upholding
in every particular the contentious
Of the government. He believed elm
ination Of problems involved in cases
decided today would go far toward
relieving the treasury department of
inconvenience 1T has suffered as a
result of multi-angled tax litigation
facing it for the past year. No esti-
mate could be obtained tonight as
to the amount in dollars and cents
affected by the courts action.
Apparently, with a view Of clear
ing the docket soon of all important
tax questions the court, before re-
eessing until April II, advanced, to
that date hearing of arguments in the
insurance dividend case, the corpor-
alton reorganization case, and the in
heiitance tax case. The first in
wolves taxation of dividends applied
as the partial payment to insurance
premiums, the second applying to
stock received from the reorganiza-
ton Of q. lsorporation-in this case
the. Dupont, Powder company and
the last, whether inheritance taxes
can be deducted from taxable in
come.
Appeal From Chicago.
The "key" case selected by the
court for decision today was the ap-
peal brought by the Merchants Loan
& Trust Co., as trustee of the estate
of Arthur Ryerson, Of Chicago, from
decisions Of the Illinois courts up
holding assessments levied by inter-
nal revenue officials upon profits real
led through the sale of certain trust
assets. Included in the trust fund
were $500 shares of stock in Jo-
seph T. Ryerson & Son, corpora
ton, which were valued at 1851, 900
March /, 1912, but which were sold in
1917 for $1,2sO, 900. Collection of a
tax on the difference in value be-
tween March 1918 and the date of
sale as income was upheld by the
court in the decision rendered today.
The word income was defined by
the supreme court in case under the
corporation excise tax act of 1909,
Justice Clark said, as gain derived
from capital, from labor or from
both combined"
"This definition, frequently .ap-
proved by this court" the opinion
continued, received an addition in
the latest income tax decision (Eisnor
vs.. Macolnber) which is especially
significant in it's application to such
a case as we have here. The def
milton was then to read: Income may
be defined as gain derived from cap
ital, from labor, or from both COM
.bined, provided it be understood to
include profits gained : through sale
or conversion Of capital assets
ut is obvious that unless this def
nition be modified, it rules the case at
bar, and, Notwithstanding the argu-
ments heard in this case, we continue
entirely satisfied with that definition
Since the fund so taxed was the
amount realized from the sale of
stock in 1917, less the capital in
vestment as of March /, 1913, it is
palpable that it was gain or
Profit produced by or derived from,
that investment and thereby becomes
the realized gain which has been
repeatedly declared to be taxable in
come within the meaning of the con-
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