In Anderson v. Helvering, Commissioner of Internal Revenue (1939), the U.S Supreme Court examined whether a taxpayer could claim a deduction for losses incurred from the sale of property in 1921 and 1922 under Section 214(a)(5) of the Revenue Act of 1918. The court ruled that such deductions were not permissible as they did not fall within any category specified by Congress in its legislation. It was held that to qualify for this type of deduction, there must be an actual loss realized through some form or manner recognized by law or business practice and it should have been sustained during the taxable year. In this case, no such loss had occurred because Mr. Anderson still owned his stock at the end of both years; he merely claimed a decrease in value due to market fluctuations which is insufficient grounds for claiming tax deductions.

In the dissenting opinion for Anderson v. Helvering, it was argued that the majority's decision to tax a widow on her deceased husband's estate was incorrect. The dissenters believed that under Section 302(c) of the Revenue Act of 1926, she should not be taxed because she did not receive any "income" from his estate; instead, what she received were merely rights to income in future years. They further contended that this interpretation is consistent with Eisner v Macomber where it was held that realization and receipt are prerequisites for taxation under Sixteenth Amendment. Therefore, they disagreed with the majority’s view which considered mere increase in value as taxable income even if there has been no actual sale or conversion into money.