Court Opinion

ID: 5022210
Source: CourtListenerOpinion
Date Created: 2021-10-01 04:20:30.224828+00
Date Added: 2024-06-11T08:17:48.376487
License: Public Domain

MONTGOMERY, Judge
(dissenting).
I think that the majority opinion is wrong, in that it places an unwarranted construction on Acts 1954, c. 79, § 34.
The majority opinion is based on the erroneous premise that the capital loss sought by appellant was extinguished as a computable item under the Kentucky income tax law in effect prior to 1954. This is not true since such law did not consider or recognize either capital gain or loss in such case. It was not within the purview of such statute; hence, it did not affect it any more than any other type of income or deduction that was not expressly mentioned in the statute. Acts 1954, c. 79, § 34 has been given an unjustified interpretation. Simply stated, this statute merely says that the old law applies to all taxable years prior to January 1, 1954, and the new Act applies to all taxable years beginning on or after January 1, 1954.
The 1954 Kentucky Act adopted the definition of “net income” as contained in Section 21 of the Internal Revenue Code, with certain variations not material here. The federal law defines “net income” as the sum total of various items which, for the purpose of illustration, are designated as A, B, C, D, E, and F, less deductions which are designated as G, H, I, and J. To illustrate further, let us consider I as representing Kentucky income tax paid in 1954 and J as capital loss. The question as to whether Kentucky income tax paid in 1954 should be considered arose when it was determined that its inclusion would result in a double deduction for that item. The Attorney General ruled that it was includible and deductible in determining net income as defined by £ection 21, although provision already had been made on the Kentucky income tax return, which resulted in a double *927deduction for this single item.- The 1956 General Assembly, Acts 1956, 4th Ex. Sess., c. 4, corrected this error by eliminating the deduction.
Now, J, capital loss, is likewise questioned, but the Court, by its majority opinion, is making the correction in the statute which should be accomplished by legislative action as was done in 1956. The General Assembly has said that net income for federal purposes shall be the same as for Kentucky purposes. It is for the General Assembly to say how net income shall be determined and what items of income and deductions shall be considered in determining it.
MILLIKEN, J., joins in dissent.