Pfaff v. Commissioner

Supreme Court

Pfaff v. Commissioner

312 U.S. 646, 61 S. Ct. 783, 85 L. Ed. 1099, 1941 U.S. LEXIS 1253, 25 A.F.T.R. (P-H) 1219

CourtSupreme Court of the United States

DecidedMarch 31, 1941

Docket479

StatusPublished

Cited by13 cases

This text of 312 U.S. 646 (Pfaff v. Commissioner) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Pfaff v. Commissioner, 312 U.S. 646, 61 S. Ct. 783, 85 L. Ed. 1099, 1941 U.S. LEXIS 1253, 25 A.F.T.R. (P-H) 1219 (1941).

Pincite

Opinion

Mr. Justice Reed

delivered the opinion of the. Court.

This case presents the same question as Helvering v. Estate of Enright, ante, p. 636. Petitioners are the executors of a deceased physician who during 1935 was a member of a medical partnership and entitled to forty per cent of its profits. He died December 25, 1935, on which date there were outstanding about $69,000 of partnership accounts receivable for services rendered to patients during his lifetime. His death worked a dissolution of the partnership under § 62(4) of the New York Partnership Law. The decedent’s interest in these ac *647 counts came to over $27,000. Both he and the partnership were on a cash basis. Pursuant to § 42 of the Revenue Act of 1934 and article 42(1) of Treasury Regulations 86, the commissioner included the decedent’s share of the accounts receivable in his 1935 income, though only at about one-fifth of face value. The Board of Tax Appeals sustained the commissioner’s view of the statute, and also ruled that the valuation of the decedent’s interest in the accounts at one-fifth of face value was amply supported. The Circuit Court of Appeals, without writing an opinion, affirmed the Board. 113 F. 2d 114. Because of a conflict with the Third Circuit’s decision in the Enright case, supra, we granted certiorari.

There is no relevant difference between these facts and Helvering v. Estate of Enright. For the reasons stated in that opinion it was proper to include in the decedent’s 1935 income the fair value of his interest in the accounts.

Affirmed.

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Mr. Justice Reed

delivered the opinion of the. Court.

This case presents the same question as Helvering v. Estate of Enright, ante, p. 636. Petitioners are the executors of a deceased physician who during 1935 was a member of a medical partnership and entitled to forty per cent of its profits. He died December 25, 1935, on which date there were outstanding about $69,000 of partnership accounts receivable for services rendered to patients during his lifetime. His death worked a dissolution of the partnership under § 62(4) of the New York Partnership Law. The decedent’s interest in these ac *647 counts came to over $27,000. Both he and the partnership were on a cash basis. Pursuant to § 42 of the Revenue Act of 1934 and article 42(1) of Treasury Regulations 86, the commissioner included the decedent’s share of the accounts receivable in his 1935 income, though only at about one-fifth of face value. The Board of Tax Appeals sustained the commissioner’s view of the statute, and also ruled that the valuation of the decedent’s interest in the accounts at one-fifth of face value was amply supported. The Circuit Court of Appeals, without writing an opinion, affirmed the Board. 113 F. 2d 114. Because of a conflict with the Third Circuit’s decision in the Enright case, supra, we granted certiorari.

There is no relevant difference between these facts and Helvering v. Estate of Enright. For the reasons stated in that opinion it was proper to include in the decedent’s 1935 income the fair value of his interest in the accounts.

Affirmed.

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Bluebook (online)

312 U.S. 646, 61 S. Ct. 783, 85 L. Ed. 1099, 1941 U.S. LEXIS 1253, 25 A.F.T.R. (P-H) 1219, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pfaff-v-commissioner-scotus-1941.

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