United States v. State Farm Fire & Casualty Co.

McWilliams, circuit judge.

The issue on appeal is whether the district court correctly held that in bankruptcy liquidation proceedings instituted prior to the Bankruptcy Tax Act of 1980, the estate of an individual bankrupt is not subject to a federal tax on income generated during the bankruptcy proceedings and that the trustee in such proceedings is not required to file a federal tax return on behalf of the bankrupt estate. We conclude that the district court misconstrued the applicable law and, therefore, reverse.

The debtors, Joe C. Joplin, Jr. and Olive Meeker Joplin, were the proprietors…