Steinbach Kresge Co. v. Sturgess

CLARK, District Judge.

The case at bar suggests the familiar difficulty of applying a statute phrased in terms of economic common places to an economically unique transaction. The statute is that which allows corporations a deduction from gross income of “losses sustained during the taxable year”. 1 2 The transaction is a modern variant of the traditional 'family settlement whereby an aging parent transfers Blackacre to his offspring, receiving in return their promise to pay him an annuity roughly commensurate with the annual rents yielded by Blackacre. In 1919 a father, aged 78, owned an…