Towne v. Eisner explained

Litigants:Towne v. Eisner
Arguedate:December 12
Argueyear:1917
Decidedate:January 7
Decideyear:1918
Fullname:Towne v. Eisner, Collector of United States Internal Revenue for the Third District of the State of New York
Usvol:245
Uspage:418
Parallelcitations:38 S. Ct. 158; 62 L. Ed. 372; 1918 U.S. LEXIS 2143; 1 U.S. Tax Cas. (CCH) ¶ 14; 3 A.F.T.R. (P-H) 2959
Holding:A stock dividend based on accumulated profits is not "income."
Majority:Holmes
Joinmajority:White, Day, Van Devanter, Pitney, McReynolds, Brandeis, Clarke
Concurrence:McKenna
Overruled:Eisner v. Macomber

Towne v. Eisner, 245 U.S. 418 (1918), is a United States Supreme Court case in which the Court held that "a stock dividend based on accumulated profits was not 'income' within the true intent of the statute."[1] Congress passed a new law in reaction to Towne v. Eisner and so the case was soon overturned by the Supreme Court in Eisner v. Macomber.

It includes the quotable passage: "A word is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and time in which it is used." ― Oliver Wendell Holmes Jr.[2]

Notes and References

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  2. https://supreme.justia.com/cases/federal/us/245/418/ Towne v Eisner