Source: https://caselaw.findlaw.com/us-supreme-court/308/252.html
Timestamp: 2019-04-20 01:23:11+00:00

Document:
HELVERING v. F. & R. LAZARUS & CO.
Messrs. Frank Murphy, Atty. Gen., and Norman D. Keller, Sp. Asst. to Atty. Gen., for petitioner.
Messrs. Murray Seasongood and Robert P. Goldman, both of Cincinnati, Ohio, for respondent.
We think the Board justifiably concluded from its findings that the transaction between the taxpayer and the trustee bank, in written form a transfer of ownership with a lease back, was actually a loan secured by the property involved. General recognition has been given the 'established doctrine that a court of equity will treat a deed, absolute in form, as a mortgage, when it is executed as security for a loan of money.' 8 In the field of taxation, administrators of the laws and the courts are concerned with substance and realities, and formal written documents are not rigidly binding. Congress has specifically emphasized the equitable nature of proceedings before the Board of Tax Appeals by requiring the Board to act 'in accordance with the rules of evidence applicable in courts of equity of the District of Columbia.' Revenue Act 1928, 601, 26 U.S.C. 611, 26 U.S.C.A.Int.Rev.Acts, page 456.
The Government relies in part upon Senior v. Braden, 295 U.S. 422 , 55 S.Ct. 800, 100 A.L.R. 794. Whatever the significance of that case, it can have no application here. In the Braden case, the equitable doctrine-here controlling-of looking to extrinsic evidence behind a transfer absolute on its face to determine whether only a security transaction was contemplated by the parties, was neither invoked nor passed upon.
Depreciation.-A reasonable allowance for the exhaustion, wear and tear of property used in the trade or business, including a reasonable allowance for obsolescence. In the case of property held by one person for life with remainder to another person, the deduction shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant. In the case of property held in trust the allowable deduction shall be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the instrument creating the trust, or, in the absence of such provisions, on the basis of the trust income allocable to each. 26 U.S.C.A.Int.Rev.Code, 23(l).
[ Footnote 2 ] 32 B.T.A. 633. The Board found the depreciable life of the property to be fifty years, instead of forty as originally claimed by respondent.
[ Footnote 3 ] 6 Cir., 101 F.2d 728; cf. Commissioner v. H. F. Neighbors Realty Co ., 6 Cir., 81 F.2d 173.
[ Footnote 4 ] City National Bank Building Co. v. Helvering, 68 App.D.C. 344, 98 F. 2d 216, 217.
[ Footnote 5 ] 308 U.S. 537 , 60 S.Ct. 74, 84 L.Ed. --.
[ Footnote 6 ] Duffy v. Central R. Co. N.J., 268 U.S. 55 , 45 S.Ct. 429; Appeal of Gladding Dry Goods Co., 2 B.T.A. 336, 338; Cogar v. Commissioner, 6 Cir., 44 F.2d 554. See, Bowman Co. v. Commissioner, 59 App. D.C. 13, 32 F.2d 404, 405; Nat'l City Bank of Seattle v. United States, 64 Ct.Cl. 236, certiorari denied 276 U.S. 620 , 48 S.Ct. 301; Commissioner v. H. F. Neighbors Realty Co., supra.
[ Footnote 7 ] 26 U.S.C. 641(c), 26 U.S.C.A.Int.Rev.Code, 1141(c).
[ Footnote 8 ] Peugh v. Davis, 96 U.S. 332 , 336; Hughes v. Edwards, 9 Wheat. 489, 495; Russell v. Southard et al., 12 How. 139; Teal v. Walker, 111 U.S. 242 , 4 S.Ct. 420. See cases collected in Parks v. Mulledy, 49 Idaho 546, 290 P. 205, 79 A.L.R. 934, 937.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.