Wilmington Trust Co. v. Helvering

The sole question presented by this case is whether certain sales of shares of stock made by the taxpayer, petitioner’s decedent, were “short” sales or sales of “long” stock. If they were not “short” sales, then the taxpayer was justified in deducting from dividends credited to the “long” shares the amount of dividends charged to the shares sold.

The taxpayer maintained several accounts with a brokerage house—“regular,” “special,” and “short.” The “regular” and “special” accounts were “long” accounts. During the years 1934 and 1935 the taxpayer’s “long” accounts were credited with dividends on…