Surasky v. United States

Surasky (plaintiff) bought 4,000 shares of Montgomery Ward stock on the advice of a major shareholder, Louis Wolfson, who developed a plan to improve the company's management and stock value by electing new directors and pushing for higher dividends; Surasky contributed $17,000 to a shareholder committee implementing this plan, which succeeded in replacing three of nine board members, prompting two managers to resign, and coincided with increased dividends. Surasky deducted the $17,000 as an ordinary and necessary non-business expense for producing income, but the district court denied the deduction as too speculative to have a direct, proximate connection to income production.