Miller v. Commissioner
United States Tax Court
75 T.C. 182 (1980)
David Martin (plaintiff) and his brother Marvin Miller jointly inherited property from their father, and their mutual, irreconcilable hostility led them to divide it through compulsory binding arbitration rather than negotiation. Martin claimed an economic loss from the resulting division and deducted it on his federal income taxes, but the Commissioner (defendant) disallowed the deduction under section 267 of the tax code, which bars deducting losses from sales or exchanges of property between brothers and certain other specified family members; Martin argued the brothers' hostility meant they were no longer "brothers" within the meaning of section 267.
Whether, under federal tax law, an economic loss incurred from the sale or exchange of property between certain family members is tax deductible.