Rosenthal v. Commissioner’s Empirical Analysis

Citation profile

4 federal appellate ·

Most-quoted passages

The sentences later courts lift from this opinion, ranked by how many decisions quote each — the parts of the opinion doing the work. These counts are smaller than the citation total above because most of the 20 citing decisions cite the case generally; a passage count includes only decisions quoting that exact language verbatim.

1. “Manifestly, the purpose of §165 is not to allow the taxpayer a full deduction for every loss in market value his property suffers by reason of a casualty. The permissible deduction for such loss is always limited to the taxpayer’s basis, or cost, in the property damaged. And the reason for this limitation is clear. Where the taxpayer suffers a loss from a destruction of market value greater than the cost of the property to him, that excess of value destroyed represents unrealized appreciation. And he may not claim a deduction for such loss because he has never recognized or paid a tax on the gain. In the extreme case, where the taxpayer’s basis in the property damaged is zero, and its entire market value represents unrealized appreciation, he is entitled to no deduction despite the size of the loss, large as it may be.'* * * [[Image here]] * * * A primary rule in the computation of a casualty loss deduction is that the loss incurred is to be determined “by reference to the single, identifiable property damaged or destroyed.” Treas. Reg. §1.165-7 (b)(2)(i).11 A taxpayer may not borrow basis from his unharmed property in order to increase the amount of his loss deduction for an injury to his other property. * * * [Fn. omitted; 416 F. 2d at 497-498 .]”

   2 later decisions quote this exact passage · from the majority
   e.g. Keefer v. Commissioner · 32 Fed. Cl. 80 - Weyerhaeuser Co. v. United States

2. “Finally the Commissioner objects that the taxpayer’s formula in effect allows him to take losses against anticipated profits from the appreciation of his property, for which he has as yet paid no taxes. This argument is deceptive. The only real amount is the out-of-pocket loss suffered by the taxpayer; this loss might indeed be larger than otherwise because of the (as yet untaxed) appreciation in the value and cost of the property, but it is nevertheless a real loss. This loss can in any event be deducted only to the extent of the original investment reduced by the previously allowed depreciation. The appreciation, can still be taxed when and if actually realized; if the property should later depreciate before it is sold it is the taxpayer who is ultimately injured by having suffered his loss at the time when prices and presumably replacement costs were high — he should not be penalized taxwise because he "realized” his "profits” through involuntary conversion at a time when prices happen to be high. [Emphasis in original.]”

   1 later decision quote this exact passage · from the majority
   e.g. Westvaco Corp. v. United States

3. “* * * Congress determined in the 1958 amendment to Section 1231 that the deduction for casualty loss was not to be reduced or minimized by reason that timber was entitled to capital gain treatment as Section 1231 property.”

   1 later decision quote this exact passage · from the majority
   e.g. William F. Ward and Carrie Duffy Ward v. The United States. Kennedy W. Ward and Audrey P. Ward v. The United States