Gragg v. United States

In this tax refund case, plaintiffs urge us to hold that § 1251 of the Internal Revenue Code is constitutionally invalid because in computing a taxpayer’s "farm net income” § 1251(e)(2)(B) excludes some gains from calculation of gross income that could otherwise be considered taxable "income” under the sixteenth amendment. Thus, *228according to plaintiffs Congress has arbitrarily denied these gains their character as income, which plaintiffs contend is constitutionally mandated. For the reasons set forth below, we reject plaintiffs’ theory, we hold for the Government and deny plaintiffs’ claim…