Helvering v. Bruun

United States Supreme Court

309 U.S. 461 (1940)

Under federal income tax laws, a taxpayer realizes a taxable gain from improvements to the land upon the expiration or termination of a lease agreement.

Relevant Facts

Charles Bruun (the plaintiff) leased land containing an old building to a tenant for 99 years. The tenant was permitted to make improvements to the land, but the improvements would be forfeited back to the plaintiff if the lease was canceled as a result of the tenant’s fault. The tenant replaced the old building with a new building. Subsequently, the tenant failed to pay rent and taxes. The plaintiff received the property back, with the new building valued about $50,000 higher than the old building. Helvering, Commissioner of the IRS (the defendant), issued a deficiency notice against the plaintiff for failing to report the income resulting from the receipt of property. The plaintiff sued, seeking a redetermination from the Board of Tax Appeals, which found for the plaintiff. The court of appeals affirmed. The United States Supreme Court granted certiorari.

Issue

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Holding & Reasoning

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Concurrence

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Dissent

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Last updated:

December 20, 2020

Judicial Opinion

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Procedural History

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Citations

309 U.S. 461 (1940)