Alice Phelan Sullivan Corp. v. United States
United States Court of Claims
381 F.2d 399 (1967)
Relevant factsFree
The corporation (plaintiff) took charitable-donation deductions in 1939 and 1940 when the corporate tax rate was 18% and 24%, generating a tax benefit of $1,877.49; when the donee returned both parcels in 1957, when the rate was 52%, the Commissioner (defendant) taxed the full recovered value at that higher current rate, and the corporation sued for a refund, arguing it shouldn't pay more than the tax benefit it originally received.
IssueFree
Whether, under the tax-benefit rule, recovered items of income are taxable at the rate applicable at the time of recovery.