Farr v. Commissioner
United States Board of Tax Appeals
Where a taxpayer makes short sales of stock and thereafter covers such sales by delivering shares out of a quantity of the same stock which he has held for more than two years at the date of the short sale, section 23(s) of the Revenue Act of 1932, providing that gains or losses from short sales of stocks shall be considered as gains or losses from sales or exchanges of stocks which are not capital assets, applies and the entire gain is taxable as ordinary income.
1Opinion of the Court
OPINION.
Murdock :
The Commissioner determined a deficiency of $715.77 in the income tax of John Farr, deceased, for the year 1932. This proceeding was instituted by the executor. His assignments of error attack the action of the Commissioner in taxing the entire amount of gain from the disposition of 1,280 shares of Central Aguirre Associates stock as ordinary income subject to normal tax and surtax, instead of taxing all, or a part, of the gain as capital gain. The facts have been stipulated.
The decedent, on January 1, 1931, was the owner of 9,500 shares of stock of Central Aguirre…
2Cases cited14 opinions
- Knowlton v. MooreSupreme Court of the United States · 1900
- Old Colony Railroad v. CommissionerSupreme Court of the United States · 1932
- Burnet v. GuggenheimSupreme Court of the United States · 1933
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- Avery v. CommissionerSupreme Court of the United States · 1934
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