Harlan F. Stone

Name: Helvering v. Horst — Opinion of the Court
Author: Harlan F. Stone

Helvering v. Horst — Opinion of the Court

Summary

“Helvering v. Horst — Opinion of the Court”, is a work by Harlan F. Stone. It explores elements such as income, donee and payment.

Quotes from Helvering v. Horst — Opinion of the Court (Harlan F. Stone)

Harlan F. Stone, Helvering v. Horst — Opinion of the Court

“ In the ordinary case the taxpayer who acquires the right to receive income is taxed when he receives it, regardless of the time when his right to receive payment accrued. But the rule that income is not taxable until realized has never been taken to mean that the taxpayer, even on the cash receipts basis, who has fully enjoyed the benefit of the economic gain represented by his right to receive income, can escape taxation because he has not himself received payment of it from his obligor. ”

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Source: Wikisource

Harlan F. Stone, Helvering v. Horst — Opinion of the Court

“ To say that one who has made a gift thus derived from interest or earnings paid to his donee has never enjoyed or realized the fruits of his investment or labor because he has assigned them instead of collecting them himself and then paying them over to the donee, is to affront common understanding and to deny the facts of common experience. ”

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Source: Wikisource

Harlan F. Stone, Helvering v. Horst — Opinion of the Court

“ The rule, founded on administrative convenience, is only one of postponement of the tax to the final event of enjoyment of the income, usually the receipt of it by the taxpayer, and not one of exemption from taxation where the enjoyment is consummated by some event other than the taxpayer's personal receipt of money or property. ”

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Source: Wikisource

Harlan F. Stone, Helvering v. Horst — Opinion of the Court

“ The owner of a negotiable bond and of the investment which it represents, if not the lender, stands in the place of the lender. When, by the gift of the coupons, he has separated his right to interest payments from his investment and procured the payment of the interest to his donee, he has enjoyed the economic benefits of the income in the same manner and to the same extent as though the transfer were of earnings and in both cases the import of the statute is that the fruit is not to be attributed to a different tree from that on which it grew. ”

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Source: Wikisource

Harlan F. Stone, Helvering v. Horst — Opinion of the Court

“ The power to dispose of income is the equivalent of ownership of it. The exercise of that power to procure the payment of income to another is the enjoyment and hence the realization of the income by him who exercises it. We have had no difficulty in applying that proposition where the assignment preceded the rendition of the services, Lucas v. Earl, supra; Burnet v. Leininger, supra, for it was recognized in the Leininger case that in such a case the rendition of the service by the assignor was the means by which the income was controlled by the donor and of making his assignment effective. ”

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Source: Wikisource

Harlan F. Stone, Helvering v. Horst — Opinion of the Court

“ This may occur when he has made such use or disposition of his power to receive or control the income as to procure in its place other satisfactions which are of economic worth. The question here is, whether because one who in fact receives payment for services or interest payments is taxable only on his receipt of the payments, he can escape all tax by giving away his right to income in advance of payment. If the taxpayer procures payment directly to his creditors of the items of interest or earnings due him, see Old Colony Trust Co. ”

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Source: Wikisource

Harlan F. Stone, Helvering v. Horst — Opinion of the Court

“ Underlying the reasoning in these cases is the thought that income is 'realized' by the assignor because he, who owns or controls the source of the income, also controls the disposition of that which he could have received himself and diverts the payment from himself to others as the means of procuring the satisfaction of his wants. ”

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Source: Wikisource

Harlan F. Stone, Helvering v. Horst — Opinion of the Court

“ One is the right to demand and receive at maturity the principal amount of the bond representing capital investment. The other is the right to demand and receive interim payments of interest on the investment in the amounts and on the dates specified by the coupons. ”

Harlan F. Stone

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