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XXXIII. The Texas statute of 1925 providing that "the rents and
revenues derived" from real property of the husband
acquired by him after marriage "by gift, devise, or
descent *
* shall be his separate property" held
not to be in conflict with the constitution of the State
of Texas, in accordance with the holdings of the
courts of that State. Id.

XXXIV. Passage in 1929 of an Act by the Texas legislature,

which had the effect of repealing the provision with
reference to the husband's separate estate, is held
not to affect the taxable status of the taxpayer in
1928. Id.

XXXV. Under the Revenue Act of 1932, the net income specified
in section 23 (n) as the base for the calculation of
the deduction for charitable contributions is, and was
intended by Congress to be, the net amount upon
which the taxpayer is taxable under sections 11 and
12; this was the gross income less all possible deduc-
tions. Pleasants, 679.

XXXVI. Where there is a "capital net loss" as defined by the
statute, such loss, by express provision of the statute,
is excluded and denied as a deduction in determining
the net income subject to the tax imposed; and such
"capital net loss" cannot be deducted from the taxable
net income for the purpose of ascertaining the amount
allowable as a deduction on account of charitable
contributions. Id.

XXXVII. In the enactment of the provisions with reference to
capital net gains and capital net losses, Congress
did not in any way evidence a purpose to take away
or limit the right of an individual taxpayer to deduct
from net income, subject to tax, his charitable con-
tributions in an amount not exceeding 15 percent of
such taxable net income; and the contrary method
employed by the Commissioner in determining whether
the taxpayer is entitled to such deduction was theo-
retical and not authorized by either the language or
the intent of the statute. Id.

XXXVIII. Since "net income" is a statutory concept, a capital net

loss, which is not an allowable deduction under sec-
tion 23 in determining the net income for the purpose
of the tax imposed by sections 11 and 12, may not be
deducted from such net income to deny or reduce the
deduction which Congress since 1917 has consistently
given to individual taxpayers for charitable contribu-
tions; any other construction would disregard legis-
lative history of persuasive force. Id.


XXXIX. Charitable contributions are "ordinary deductions" un-
der section 23 and in the case of a taxpayer having a
capital net loss his net income as defined by section
23 (n) for the purpose of computing the allowable
deduction for charitable contributions is "ordinary net
income," which is the base for the calculation of the
tax. Id.

XL. Reviewing the history of legislation relating to deduc-
tions for charitable contributions and to capital losses,
the court held that there is nothing in this history
showing any intent on the part of Congress to reduce
or take away the deduction for charitable contribu-
tions. Id.

XLI. The court is unable to concur with a group of decisions
cited (beginning with Lockhart v. Commissioner, 32
B. T. A. 732, affirmed C. C. A., 3rd Circuit; 89 Fed.
(2d), 143) in which it was held that a capital net
loss, although not a permissible deduction under Sec-
tion 23 for the purpose of determining net income sub-
ject to the tax imposed by sections 11 and 12, might,
nevertheless, be deducted from such net income to
determine the amount on which the 15 percent limita-
tion for charitable contributions was to be computed,
on the ground that this conclusion was required by
the opinion of the Supreme Court in Helvering v. Bliss,
293 U. S. 144; the question involved does not appear
to have been considered or decided by the Supreme
Court, and it is held that the decision lends greater
support to the position of the plaintiff than to that
of the defendant. Id.

XLII. Where there is a capital net gain, such gain is a part or

all of the taxpayer's net income, but where there is a
capital net loss the ordinary net income is the tax-
payer's entire statutory net income. Id.

XLIII. The statute of limitations on assessment of any tax
finally found to be due in accordance with the opinion
and mandate of the Circuit Court of Appeals remains
suspended until the decision of the Board of Tax
Appeals becomes final and for sixty days thereafter,
and then commences to run; the fact that the Commis-
sioner was authorized to assess and collect the deficien-
cies first determined by the Board, when no bond
was made by the taxpayer when it appealed to the
Circuit Court of Appeals, does not, under Section 277
(a) and (b) of the Revenue Act of 1926, as amended
by section 504 of the Revenue Act of 1928, affect the
statute of limitations. Olds & Whipple, 705.

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XLIV. The taxpayer having on April 2, 1934, paid the full amount
of the deficiencies set forth by the Commissioner in the
d statutory sixty day deficiency notices and in accordance
with the assessment of the Commissioner on March 9,
1934, the suspension of the period of limitation ap-
plicable to 1927 and 1929 did not cease; no claim having
been made by the Commissioner for additional defi-
ciencies or additional amounts for those years prior
to the first hearing before the Board on May 15, 1933,
and no additional letter having been sent by the Com-
missioner within the unused limitation period running

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I from the assessment made March 9, 1934, or from the
Cdate of payment, April 2, 1934, the determination by
ps the Board or assessment by the Commissioner of any
/ further tax on March 27, 1936, over and above the
amounts claimed in the original deficiency notice, was
not barred, and the credit of the allowed overpayment
for 1928 against the additional deficiencies for 1927
and 1929 was legal; it was not necessary for the Com-
missioner to make claim before the Board or the Circuit
Court of Appeals for additional amounts in order to con-
tinue the suspension of the statute of limitations. Id.
XLV. Where a decision of the Board of Tax Appeals is appealed


and reversed, and under the mandate of the appellate
court, the Board is directed to take further proceedings

to carry out the decision of the appellate court, it is
held that the only means available to contest the cor-
rectness of a final decision of the Board entered pur-
suant to the opinion and mandate, or the authority of
the Board to make such decision, is by appropriate
proceeding in the appellate court. Id.

XLVI. Where a taxpayer raises before the Board certain specific

issues with reference to the year or years involved,
and a decision of those issues in his favor produces a
larger deficiency for such year or years than that set
forth in the deficiency notices of the Commissioner, it
is held that no specific claim by the Commissioner is
required by the statutes in order to give the Board
authority to enter a decision for the correct deficiency;
the taxpayer itself having by raising the issues con-
ferred upon the Board jurisdiction to enter a decision
..or decisions. Id.

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XLVII. Where a case decided by the Board of Tax Appeals is

appealed to and reversed by the Circuit Court of Ap-
peals, such court is not limited by the provisions of
sections 274 (e) and 272 (e) of the Revenue Acts of
64834-38-CC-vol. 86-52

TAXES Continued.

1926 and 1928 in the decision of the issues raised on
appeal by the taxpayer, and if justice requires that
issues raised by the taxpayer on appeal be decided in
his favor, and such decision results in deficiencies in
excess of those originally determined by the Board, it is
held that the taxpayer is in no position to complain. Id.
XLVIII. Where upon the mandate of the Circuit Court of Ap-
peals, the Board restored the proceedings to its
docket, and in its order directed the parties to submit
computations of the plaintiff's tax liability for the
years 1927, 1928, and 1929; and thereafter the Com-
missioner filed a recomputation of the tax for the
years involved, it is assumed, since it is not disputed,
that the Commissioner's recomputation complied with
the mandate of the Court, and that it was correct;
the filing of the computation and the submission of
the cases thereon to the Board are held to have con-
stituted a rehearing within the meaning of Sections
274 (e) and 272 (e) of the Revenue Acts of 1926 and
1928; and the Commissioner was therefore enabled at
such time to make claim for increased deficiencies;
and the judgments of the Board are therefore held
to be in all respects legal and proper. Id.
XLIX. Under section 277 (b) of the Revenue Act of 1926 as
amended and section 277 of the Revenue Act of 1928,
which are identical, it is held that the intent of Con-
gress was to provide that the stated basic period of
limitation upon assessment shall be suspended for a
definite and specific period, easily calculable; for the
period between the date of mailing the deficiency
notice until the date when the Commissioner may
assess the tax, and, in any event, if a proceeding is
placed on the docket of the Board, until the decision
of the Board becomes final and for sixty days there-
after. Id.

L. Where the overpayment for 1928 determined by the
Board and allowed by the Commissioner under a
timely claim for refund was credited by the Commis-
sioner against the final deficiencies determined by the
Board for 1929 and the balance of such overpayment,
plus certain other items, was credited in partial satis-
faction of the final deficiency of $12,234.67 determined
by the Board for 1927; leaving a balance of approxi-
mately $2,443.84 of the final deficiency in tax deter-
mined for 1927 still due from taxpayer, it is held that
there was no account stated as evidenced by the certifi-


cate of overassessment for 1928 mailed to plaintiff on
April 13, 1936; where there were other taxes due and
owing by the taxpayer for 1927 and 1928, as the Court
has held there were, the credit to such taxes of the
overpayment for 1928 was mandatory. Id.

LI. Where a corporation on March 12, 1931, filed its return
for the calendar year 1930 and with that return made
a written request under Section 275 (b) of the Reve-
nue Act of 1928 for a prompt determination and assess-
ment of its tax liability for 1930, it is held that the
provisions of section 275 (b) applied to the written
request and that collection of an additional tax, and
interest, was barred by the statute of limitation of
one year when tax and interest were assessed Febru-
ary 18, 1933. W. T. White et al., 728.

LII. An examination of the history of the section, 275 (b),
leads to the conclusion that Congress intended the
benefit of the one year limitation period to extend and
become available to a corporation which had become
completely dissolved, as well as to corporations con-
templating dissolution, at the time request for prompt
determination was made; the three stipulated require-
ments of the section are alternative, and compliance
with any one is sufficient to set in motion the one
year period of limitation. Id.

LIII. Where taxpayers received bonds in new or consolidated
corporation in exchange for stock which it had held
in six of the eight constituent corporations, it is held
that the bonds were securities within the meaning of
section 112 (b); it was not necessary that the plaintiff
receive stock in order to be a party to the reorgani-
zation. Id.

LIV. Where manufacturing corporation on January 16, 1933,
declared an extra dividend of 80% "Payable soon as
convenient," it is held that such dividend, paid in
October, 1933, was not subject to 5 percent tax imposed
by Section 213 of the National Industrial Recovery
Act, approved June 16, 1933. Thompson Mfg. Co., 745.

See also Evidence.

Where Navy travel regulations provided that transportation
for dependents will be furnished after receipt of orders in-
volving a permanent change of station, but prior to receipt of
subsequent orders involving another permanent change of sta-
tion, and travel was not undertaken until after receipt of
subsequent orders, it is held that the Navy regulations are
valid. Picking, 590.

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