Diminution of Loss

Legal Research Home > United States Constitution > Diminution of Loss

Diminution of Loss.—Mere diminution of loss is neither gain, profit, nor income. Accordingly, one who in 1913 borrowed a sum of money to be repaid in German marks and who subsequently lost the money in a business transaction cannot be taxed on the curtailment of debt effected by using depreciated marks in 1921 to settle a liability of $798,144 for $113,688, the ''saving'' having been exceeded by a loss on the entire operation.⁵²

Last modified: January 11, 2006