Arrowsmith v. Commissioner, 344U.S.6 (1952), is a United States Supreme Court case regarding taxation. The case involves taxpayers who liquidated a corporation in 1937. The taxpayers (properly) reported the income from the liquidation as long-term capital gains, thus obtaining a preferential tax rate. Subsequent to the liquidation in 1944, the taxpayers were required to pay a judgment arising from the affairs of the liquidated corporation. The taxpayers classified this payment as an ordinary business loss, which would allow them to take a greater deduction for the loss than would be permitted for a capital loss. — Excerpted fromArrowsmith v. Commissioneron Wikipedia, the free encyclopedia.
907795Arrowsmith v. Commissioner of Internal Revenue — SyllabusHugo Black