UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
January 30, 1939
COMMISSIONER OF INTERNAL REVENUE; COMMISSIONER OF INTERNAL REVENUE V. HEINZ.
Appeal from United States Board of Tax Appeals.
Before DAVIS and THOMPSON, Circuit Judges, and DICKINSON, District Judge.
These appeals were disposed of in an opinion filed by this court on February 11, 1938 (3 Cir., 94 F.2d 832) but thereafter petitions for rehearing were filed by both parties which are denied except as herein considered.
The first question involved in whether a certain loss sustained by the taxpayer in 1931 was an ordinary loss, as was held by the Board of Tax Appeals, or whether it was a capital loss as contended by the Commissioner.
Upon reexamination of the statutes and decisions touching this question, we are convinced that the Board reached the correct conclusion, and, for the reasons stated in our prior opinion, the redetermination of the Board on this question is affirmed.
The second question is whether the deduction for charitable gifts allowed by the statute, Revenue Acts 1928, 1932, § 23(n), 26 U.S.C.A. § 23(o ), is measured by taking 15% of the taxpayer's net income after all capital losses have been deducted, as the Board held, or whether it is measured by taking 15% of the taxpayer's net income computed without regard to capital losses, as the taxpayer contends.
Since filing our opinion in this case the United States Supreme Court has determined this question in accordance with the taxpayer's contention. United States v. Frederick Pleasants, 59 S. Ct. 281, 83 L. Ed. , decided January 3, 1939.
Therefore, the order of the Board of Tax Appeals on this question is reversed, and the cause is remanded to it to redetermine the tax on this point in accordance with the opinion in the Pleasants Case.
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