363 F2d 441 Chewning v. Commissioner of Internal Revenue

363 F.2d 441

E. Taylor CHEWNING and Caroline Chewning, Husband and Wife, Petitioners,

No. 10394.

United States Court of Appeals Fourth Circuit.

Argued June 3, 1966.

Decided June 22, 1966.

David E. Wasserstrom, Washington, D. C. (Goodwin, Rosenbaum, Meacham & White, Washington, D. C., on brief), for petitioners.

William A. Friedlander, Atty., Dept. of Justice (C. Moxley Featherston, Acting Asst. Atty. Gen., Lee A. Jackson and David O. Walter, Attys., Dept. of Justice, on brief), for respondent.

Before HAYNSWORTH, Chief Judge, and BRYAN and J. SPENCER BELL, Circuit Judges.


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The petitioners seek review of the Tax Court's decision1 that their uninsured loss from the destruction by storm of boxwood bushes located at their residence is not deductible as an ordinary loss under section 165(c) (3) of the Internal Revenue Code of 1954, but must be applied pursuant to section 1231 of the Code in reduction of the petitioners' gains from sales of property used in their trade or business.


We are persuaded by the able opinion of Judge Atkins that the Tax Court was correct in its interpretation of the Code and that we must reject the reasoning of Maurer v. United States, 284 F.2d 122 (10 Cir. 1960) in favor of that of Morrison v. United States, 355 F.2d 218 (6 Cir. 1966). While the taxpayers' position was not without some basis in the language of section 1231 prior to the 1958 amendment (Maurer applied the statute as it existed before the amendment), we think that amendment2 clearly indicated Congress' intention that the taxpayers' loss should not be excluded from treatment under section 1231. The judgment of the Tax Court is therefore





The Tax Court's opinion is reported at 44 T.C. 678


See the Finance Committee Report to the Technical Amendments Act of 1958 (S.Rep. No. 1983, 85th Cong., 2d Sess. 74, U.S.Code Cong. & Admin.News 1958, p. 4791.)