Fairbanks v. United States, 306 U.S. 436 (1939). · Go Syfert
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Fairbanks v. United States, 306 U.S. 436 (1939). Cases Citing This Book View Copy Cite
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cited 2× by 2 distinct cases, last quoted 1939 · …amounts received by the holder upon the retirement of bonds as amounts received in exchange therefor ≈ altered
cited 2× by 1 distinct case, last quoted 1951 · …measures the gain and gives the cue for tax incidence. ⚠ not in text
cited 2× by 2 distinct cases, last quoted 1968 · 2 courts · …payment and discharge of a bond is neither sale nor exchange within the commonly accepted meaning of the words. ✓
271 citation events (13 in the last 25 years) across 22 distinct courts.
Strongest positive: Michaels v. Commissioner
Treatment trajectory · 1939 → 2026 · click a year to view as-of
1939 1982 2026
Top citers, strongest first. 21 distinct citers. How cited ↗
cited Cited as authority (rule) Michaels v. Commissioner
unknown court · 1986 · confidence medium
Fairbanks v. United States, 306 U.S. 436, 437 (1939); Osenbach v. Commissioner, 198 F.2d 235, 236-237 (4th Cir. 1952), affg. 17 T.C. 797 (1951).
examined Cited "see" Nahey v. Commissioner (3×)
Tax Ct. · 1998 · signal: see · confidence high
See Fairbanks v. United States, 306 U.S. 436 , 83 L.
discussed Cited "see" Brian L. and Carole J. Nahey v. Commissioner
Tax Ct. · 1998 · signal: see · confidence high
See Fairbanks v. United States, 306 U.S. 436 (1939); National-Standard Co. v. Commissioner, 749 F.2d 369 (6th Cir. 1984), affg. 80 T.C. 551 (1983); Osenbach v. Commissioner, 198 F.2d 235 (4th Cir. 1952), affg. 17 T.C. 797 (1951); Lee v. Commissioner, 119 F.2d 946 (7th Cir. 1941), affg. 42 B.T.A. 920 (1940); Guthrie v. Commissioner, 42 B.T.A. 696 (1940); Hale v. Commissioner, 32 B.T.A. 356 (1935), affd. sub nom.
discussed Cited "see" Herrick v. Commissioner
Tax Ct. · 1984 · signal: see · confidence high
See Fairbanks v. United States, 306 U.S. 436 (1939) . *498 Petitioner's contract rights were not transferred to Farmers, they "merely came to an end and vanished." Foote v. Commissioner, supra at 936 , citing Commissioner v. Starr Brothers, Inc., 204 F. 2d 673 , 674 (2d Cir. 1953) , revg. 18 T.C. 149 (1952) .
cited Cited "see" Bradshaw v. United States
Ct. Cl. · 1982 · signal: see · confidence high
See Fairbanks v. United States, 306 U.S. 436, 437 (1939).
cited Cited "see" Post v. Commissioner
Tax Ct. · 1979 · signal: see · confidence high
See Fairbanks v. United States, 306 U.S. 436 (1939) . *199 Accordingly, we conclude that the $247,390.64 payment should be treated as ordinary income.
cited Cited "see" Michtom v. United States
Ct. Cl. · 1978 · signal: see · confidence high
See Fairbanks v. United States, 306 U. S. 436 (1939); Eustice, Contract Rights, Capital Gain, and Assignment of Income —The Ferrer Case, 20 Tax L.
cited Cited "see" Norton v. United States
Ct. Cl. · 1977 · signal: see · confidence high
See Fairbanks v. United States, 306 U. S. 436 (1939). (4) Was the property acquired with an intention that it would serve an integral function in the taxpayer's regular business activities?
discussed Cited "see" Wilson v. Commissioner (2×)
unknown court · 1969 · signal: see · confidence high
See Fairbanks v. United States , 306 U.S. 436 (1939) ; Galvin Hudson , 20 T.C. 734 (1953) .
examined Cited "see" Robert A. Riddell v. Leon W. Scales (3×)
9th Cir. · 1969 · signal: see · confidence high
“It is well settled that where a note is paid by or on behalf of the maker in satisfaction of the maker’s liability thereon, a sale or exchange of property * * does not result.” (Lee v. Commissioner of Internal Revenue (7 Cir. 1941) 119 F.2d 946, 948 ; see Fairbanks v. United States (1939) 306 U.S. 436 , 59 S.Ct. 607 , 83 L.Ed. 855 ; Phillips v. Frank (9 Cir. 1961) 295 F.2d 629, 633 , Section 1232 of 26 U.S.C., which makes the retirement of certain indebtedness an exchange, does not apply to the taxpayers’ notes.
examined Cited "see" Midland-Ross Corp. v. United States (3×)
N.D. Ohio · 1963 · signal: see · confidence high
See Fairbanks v. United States, 306 U.S. 436 , 59 S.Ct. 607 , 83 L.Ed. 855 (1939).
cited Cited "see" Gordon v. Commissioner
Tax Ct. · 1957 · signal: see · confidence high
See Fairbanks v. United States, 306 U. S. 436 (1939).
cited Cited "see" Gordon v. Commissioner
Tax Ct. · 1957 · signal: see · confidence high
See Fairbanks v. United States, 306 U. S. 436 (1939).
examined Cited "see" Paine v. Commissioner (3×)
8th Cir. · 1956 · signal: see · confidence high
See Fairbanks v. United States, 306 U.S. 436 , 59 S.Ct. 607 , 83 L.Ed. 855 ; Lee v. Commissioner, 7 Cir., 119 F.2d 946 .
examined Cited "see" F. Rodney Paine and Anna H. Paine v. Commissioner of Internal Revenue, Cecil B. Myers Trust U/w Lucy Myers, Deceased, Cecil B. Myers, James S. Matteson and Northern Minnesota National Bank, Trustees v. Commissioner of Internal Revenue (3×)
8th Cir. · 1956 · signal: see · confidence high
See Fairbanks v. United States, 306 U.S. 436 , 59 S.Ct. 607 , 83 L.Ed. 855 ; Lee v. Commissioner, 7 Cir., 119 F.2d 946 . 13 The Commissioner had contended before the Tax Court that the transfers made of the notes by the trustees to local banks were not bona fide, and that they therefore did not constitute sales within the meaning of § 117(a)(4), but the Tax Court rejected this contention, saying: 'While the transfers were deliberately planned for the purpose of minimizing taxes, we find that the sales were absolute, and were effectuated in good faith by the trustees in the belief that their a…
examined Cited "see" Lewis N. Cotlow v. Commissioner of Internal Revenue (3×)
2d Cir. · 1955 · signal: see · confidence high
See Fairbanks v. United States, 1939, 306 U.S. 436 , 59 S.Ct. 607 , 83 L.Ed., 855 ; Commissioner v. Starr Bros., 2 Cir., 1953, 204 F.2d 673 ; General Artists Corp. v. Commissioner, 2 Cir., 1953, 205 F.2d 360 , certiorari denied, 1953, 346 U.S. 866 , 74 S,Ct. 105, 98 L.Ed. 376 ; Guthrie v. Commissioner, 1940, 42 B.T.A. 696 .
discussed Cited "see" Hatch v. Commissioner (2×)
Tax Ct. · 1950 · signal: see · confidence high
See and compare Fairbanks v. United States , 306 U.S. 436 ; John H.
discussed Cited "see" Lurie v. Commissioner (2×)
Tax Ct. · 1945 · signal: see · confidence high
See Fairbanks v. United States, 306 U. S. 436 .
discussed Cited "see, e.g." National-Standard Co. v. Commissioner
Tax Ct. · 1983 · signal: see also · confidence low
See concurring opinion of Skelton, J., in Gillin v. United States, 191 Ct. Cl. 172 , 423 F.2d 309, 314 (1970); see also note 13 infra. We do, however, find significance in the court’s reliance on Fairbanks v. United States, 306 U.S. 436 (1939), in holding that no sale..or-exchange had occurred.
cited Cited "see, e.g." Dixon v. United States
SCOTUS · 1965 · signal: see, e.g. · confidence low
See, e. g., Fairbanks v. United States, 306 U. S. 436 ; Watson v. Commissioner, 27 B.
discussed Cited "see, e.g." Towers v. Commissioner (2×)
unknown court · 1955 · signal: see also · confidence low
See also Fairbanks v. United States , 306 U.S. 436 (1939) .
Retrieving the full opinion text from the archive…
Fairbanks
v.
United States
65.
Supreme Court of the United States.
Mar 27, 1939.
306 U.S. 436
1939 U.S. LEXIS 1166
Mr. William Stanley argued the cause, and Mr. Arthur F. Driscoll was on a brief, for petitioner., Mr. Andrew D. Sharpe, with whom Solicitor General' Jackson, Assistant Attorney General Morris, and Messrs. Sewall Key and Maurice J. Mahoney were on the brief, for the United States., By leave of Court, Messrs. Carroll N. Perkins and Leonard A. Pierce filed a brief on behalf of Frances M. Averill, as arnica curiae, in support of ‘petitioner.
McReynolds.
Cited by 145 opinions  |  Published
Mr. Justice McReynolds

delivered the opinion of the Court.

Both courts below ruled that gain derived by the petitioner from redemption of bonds during 1927, 1928 and'[*437] 1929 was not “capital gain” within the meaning of the controlling statutes.

No contest now exists concerning the facts. The narrow point as counsel agree is this — Must the redemption of bonds before maturity by the issuing corporation be treated as tantamount to a sale or exchange of capital assets within the meaning of § 208 (a) (1), Revenue Act 1926, and § 101 (c) (1), Revenue Act 1928. [1]

If redemption amounts to sale or exchange, the petitioner’s gain was subject to taxation at,the twelve and one-half per cent rate; otherwise, under normal and surtax rates.

Payment and discharge of a. bond is neither sale nor exchange within the. commonly accepted meaning of thé words. The courts below found no sufficient reason for disregarding this and rightly applied the statutes under that view.

The Tax Acts of 1921, 1924, 1926, 1928 and 1932 contain like definitions of capital gain. From 1921 to 1929 the Commissioner held that such gain did not arise from redemption. In 1929 the Board of Tax Appeals held otherwise. Werner v. Commissioner, 15 B. T. A. 482. But in 1932 it definitely overruled that determination. Watson v. Commissioner, 27 B. T. A. 463.

[*438] The Revenue Act 1934 (May 10, 1934, c. 277, 48 Stat. 680, 714N715) provides—

“Sec. 117. Capital Gains and Losses.
(a) General Rule. — In the case of a taxpayer, other than a corporation, only the following percentages of the gain or loss recognized upon the sale or exchange of a capital asset shall be taken into account in computing net income: . . .
(f) Retirement of Bonds, Etc. — For the purposes of this title, amounts received by the holder upon the retirement of bonds, debentures, notes, or certificates or other evidences of indebtedness issued by any corporation (including those issued by a government or political subdivision thereof), with interest coupons or in registered form, shall be considered as amounts received in exchange therefor.”

What we regard as the correct meaning of the definition of capital gain in the Revenue Act 1921 and its four successors is accentuated by long-continued executive construction, also the last conclusion of the Board of Tax' Appeals.

The Circuit Court of Appeals below was right in holding that by the Act 1934 Congress did not attempt to construe the prior Acts and purposely made a material addition thereto. In Averill v. Commissioner, 101 F. 2d 644, the Circuit Court of Appeals First Circuit acted upon a different view. This conflict caused us to bring up the present cause notwithstanding the application for cer-tiorari had been denied earlier in the term.

The challenged judgment must be

Affirmed.

1

Revenue Act 1921 (November 23, 1921, c. 136, 42 Stat. 227, 232) provides—

“See. 206. (a) That for the purpose of this title:
(1) The term 'capital gain’ means taxable gain from the sale or exchange of capital assets consummated after December 31, 1921.”

This provision without material change was reenacted by Revenue Act 1924 (June 2, 1924, c. 234, § 208 (a) (1), 43 Stat. 253, 262); Revenue Act 1926 (February 26, 1926, c. 27, § 208 (a) (1), 44 Stat. 9, 19); Revenue Act 1928 (May 29, 1928, c. 852, § 101 (c) (1), 45 Stat. 791, 811); Revenue Act of 1932 (June 6, 1932, c. 209, § 101 (c) (1), 47 Stat. 169, 191) ,