- 12 - taxable income was not a Sixteenth Amendment-permitted income tax. 87 F.2d at 324-325. The Circuit Court of Appeals analyzed the situation as follows (87 F.2d at 325): While the computation of income is made with due and necessary regard to periods of time, which are established years either calendar or fiscal, it cuts altogether too fine to say that true, and therefore taxable, income can only be ascertained by putting together all the profit and loss transactions of the period and determining net income accordingly regardless of the fact that they may in whole or in part be quite unrelated except for the time element and the fact that they were those of the same taxpayer. If, for instance, a separate and distinct transaction during the year results in a net realized gain to the taxpayer in and of itself, income which is taxed has been received, but Congress may, or may not, have allowed deductions which as a matter of computation will relieve that income in whole or in part from the taxation to which otherwise it would be subject. * * * Accordingly, the Circuit Court of Appeals upheld the constitutionality of the section 23(r) limitation. To the same effect is White v. Commissioner, 37 B.T.A. 1106 (1938). The taxpayer sustained a net loss in his securities trading. 37 B.T.A. at 1109. After discussing Davis v. United States, supra, we stated in White as follows (37 B.T.A. at 1110- 1111): This petitioner, however, asserts that the deduction he seeks is not a statutory deduction, but falls within the first classification of deductions made by thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
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