David Martin (plaintiff) and Marvin Miller jointly inherited property from their father. Martin and Miller wished to divide the property between them, but the brothers’ mutual and irreconcilable hostility led them to agree that their property should be divided by compulsory binding arbitration. Martin claimed to have incurred an economic loss on the resulting property division, and deducted the loss from his federal income tax. The commissioner of internal revenue (commissioner) (defendant) determined that Martin’s loss was not tax deductible. The commissioner disallowed Martin’s deduction on the ground that, under § 267 of the federal tax code, economic losses on the sale or exchange of property between brothers or certain other specified family members were non-deductible. Martin petitioned the tax court for a redetermination, arguing that § 267 did not apply to his situation because Martin and Miller were no longer “brothers” due to their mutual hostility.