Helvering v. Gregory
E62216
Helvering v. Gregory is a landmark 1935 U.S. Supreme Court tax law case that established the principle that transactions must have a genuine business purpose beyond tax avoidance to be respected for tax purposes.
Aliases (1)
Statements (47)
| Predicate | Object |
|---|---|
| instanceOf |
United States Supreme Court case
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landmark case → tax law case → |
| arguedDate |
1934-11-14
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|
| category |
United States Supreme Court cases in 1935
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United States corporate taxation case law → United States taxation and revenue case law → |
| citation |
293 U.S. 465
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|
| court |
Supreme Court of the United States
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|
| decisionDate |
1935-01-07
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|
| decisionType |
unanimous decision
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|
| factualBackground |
Gregory caused a new corporation to be formed, transferred appreciated stock to it, then liquidated it to obtain the stock at capital gains rates.
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|
| fullName |
Helvering v. Gregory, 293 U.S. 465 (1935)
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|
| holding |
A transaction must have a genuine business purpose beyond tax avoidance to be respected for tax purposes.
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A transaction that complies with the literal language of the statute may still be disregarded if it is a mere device to avoid tax. → |
| impact |
Became a foundational case for the business purpose requirement in U.S. tax law.
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Frequently cited in tax planning and tax litigation involving avoidance schemes. → Influenced later development of the economic substance doctrine. → |
| issue |
Whether a purported corporate reorganization undertaken solely to avoid tax qualified as a reorganization under the Revenue Act.
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|
| jurisdiction |
United States
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|
| keyConcept |
economic substance
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sham transaction → tax-motivated reorganization → |
| languageOfOpinion |
English
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|
| legalArea |
corporate reorganization
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federal income tax law → tax avoidance → |
| lowerCourtJudge |
Learned Hand
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|
| opinionBy |
Justice George Sutherland
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|
| originatingJurisdiction |
United States Court of Appeals for the Second Circuit
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|
| partyRole |
Gregory was a taxpayer and shareholder.
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Helvering was the Commissioner of Internal Revenue. → |
| petitioner |
Guy T. Helvering, Commissioner of Internal Revenue
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| precedentFor |
cases evaluating whether transactions have a legitimate non-tax business purpose.
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|
| principleEstablished |
business purpose doctrine
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substance over form doctrine in tax law → |
| reasoning |
The Court looked to the substance of the transaction rather than its formal compliance with statutory language.
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The reorganization provisions were intended to apply only to transactions undertaken for reasons germane to the business. → |
| relatedDoctrine |
economic substance doctrine
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step transaction doctrine → substance over form → |
| reporter |
United States Reports
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|
| respondent |
Evelyn F. Gregory
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|
| result |
Judgment of the Second Circuit affirmed.
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|
| statuteInterpreted |
Revenue Act of 1928
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|
| volume |
293
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|
| year |
1935
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|
Referenced by (2)
| Subject (surface form when different) | Predicate |
|---|---|
|
Helvering v. Gregory
("Helvering v. Gregory, 293 U.S. 465 (1935)")
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|
fullName |
|
Guy T. Helvering
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|
notableWork |