Bisbee daily review., 1921-03-29
SUPREME COURT HANDS DO MN ] VITAL RULINGS ON INCOME TAX
Decision Holds Increase In Capital Investment
 Taxable As Income
OPINION UNANIMOUS
Justice Clark Definition Of Income" In 1909,
 Upheld By Court

WASHINGTON, March 2S.-Three victories were won by the government today in the supreme court interpreta- tion of. the term income" for the as- sessment of taxes under the income and excess profits act. The court held that any gain derived from corporation securities or corporate assets, and any increase in the value of a capital in- vestment, when realized, is taxable as income The opinions were endorsed by the entire court.
 Solicitor General Frierson interpret ed the opinion as upholding all the contentious of the government. He believed elimination of problems in- volved in cases decided would go far toward relieving the treasury depart ment of inconveniences resulting from the multi-angled tax litigation facing it for the last year.
 No estimate could be obtained as to the amount affected by the courts ac- tion. Apparently with view of early clearing the docket of all important tax questions, the court before recess ing until April II, advanced 10 that date hearing of arguments in the insur- ance dividend case. the corporation re organization case, and the inheritance tax case. The first involves taxation of dividends applied to partial pay ment of insurance premiums, the sec tion applies to stock received from the reorganiZation of a corporatlon-ih this ease the Dupont Powder company and the last, whether inheritance tax can be deducted from taxable income The 'key case" selected for decision today was the appeal brought by the Merchants Loan and Trust company as trustee of the estate ot Arthur ity- erson of Chicago, from decisions ol Illinois courts upholding assessments levied bv internal revenue officials on profits realized through sale of cer tain trust assets. Included in the trust fund were $500 shares Qf stocs in Joseph T. Ryerson & Son, corpo ration. which were valued at $56l,OVI March 1. 1913. but which were sold II 1e17 for l.2SO,OO0. Collection of tax m inc difference in value between March. 1913. and the date of sale, a' income. was upheld by the courts de cisiOn.
 Definition Unchanged
 The word income" was deilheu D! inc supreme court Tn case uhuSl .N' cornoration excise act of 1909, Justic' clark said. as "a gain derived Iron canitaI from labor, or from both
 Tt is obvious that unless this ueii milton be modified it rules the case a bar" the opinion said, "and, notwitn standing the arguments heards' w continue entirely satisfied with una definition. Since the fund so taxe' was the amount realized from the sai of stock in 1917. less the capital III vestment as of March l, l9l3' IL naInable that it was a gain or proiit produced by or derived from that II Vestment and thereby became the r' elized gain which has been repeate' lv declared to be taxable income
 The opinion quickly dismissed col tention that the word income" as use in the sixteenth constitutional amend ment did not include gain realized D single transaction but only proii' reaIized by one engaged in buying an selling as a business.
 "It is sufficient to say of this cohtei tion 9 the court ruled. that no sue distinction was recognized in the CIV va, income tax act or in the lncon
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