United States v. Generes
United States Supreme Court
405 U.S. 93 (1972)
Allen Generes (plaintiff) owned 44 percent of the shares in the family-owned construction company that he helped found. Generes was also employed as the company’s president and drew a company salary that represented less than one-third of his annual income from all sources, including company shares. When Generes was forced to indemnify a lender for a loan that the company could not repay, Generes claimed that the indemnification was a business bad debt and therefore eligible for a deduction from his gross income. Generes filed suit against the United States government (defendant) in federal district court for a refund. The district court ruled in Generes’s favor, finding that Generes had taken on the debt because he had a significant business interest in protecting his employment. The court of appeals affirmed. The government argued that Generes’s business motivation needed to be dominant, not just significant. To resolve a circuit split on whether the test was the significance or dominance of the taxpayer’s motivation, the United States Supreme Court granted certiorari.
Rule of Law
Holding and Reasoning (Blackmun, J.)
What to do next…
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 726,000 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
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 726,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 45,700 briefs, keyed to 983 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.