Higgins v. Commissioner

Higgins (plaintiff) maintained offices in New York and Paris with dedicated staff who, under his close supervision, managed his substantial real estate and securities holdings for over thirty years, including recordkeeping and collecting interest and dividends; he deducted the salaries and office expenses as ordinary business expenses in 1932 and 1933. The Commissioner (defendant) disallowed the deductions tied to his securities activities, though conceding his real estate activities constituted a business, and the Board of Tax Appeals apportioned his expenses accordingly, finding only the real-estate-related expenses deductible; the Court of Appeals affirmed, and the Supreme Court granted certiorari.