Helvering v. Gowran

302 U.S. 238 (1937)

From our private database of 46,000+ case briefs, written and edited by humans—never with AI.

Helvering v. Gowran

United States Supreme Court
302 U.S. 238 (1937)

Facts

Gowran (plaintiff) owned common stock in the Hamilton Manufacturing Company (corporation). On July 1, 1929, the corporation announced a dividend of $14 a share on the common stock, payable in preferred stock with $100 par value. Gowran received slightly over 533 shares, which the corporation redeemed at par value in October 1929. Gowran reported the income as capital gains. The commissioner of the Internal Revenue Service (defendant) assessed additional taxes, claiming that this amount was taxable as a dividend at ordinary income tax rates. Gowran appealed to the Board of Tax Appeals, which ruled in favor of the commissioner. Gowran appealed to the United States Court of Appeals for the Seventh Circuit, which ruled in favor of Gowran, holding that a stock dividend was not subject to tax under § 115(f) of the Internal Revenue Code and that the stock was a tax-free gift that Gowran received with the same basis as held by the corporation, $100. The commissioner appealed to the United States Supreme Court, contending that § 115(f) did not apply to the receipt of a different type of stock from a dividend, and, in the alternative, that Gowran’s basis in the preferred stock was zero and the sale did not qualify for capital-gains treatment.

Rule of Law

Issue

Holding and Reasoning (Brandeis, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 742,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 742,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,000 briefs, keyed to 986 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 742,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,000 briefs - keyed to 986 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership