In the case of Angelus Milling Co. v. Commissioner of Internal Revenue, 1944, the Supreme Court was tasked with deciding whether a corporation could deduct from its gross income amounts paid to redeem its own stock as "ordinary and necessary" business expenses under section 23(a) of the Revenue Act of 1936. The court ruled in favor of the Commissioner, stating that such payments were not deductible because they represented capital expenditures rather than ordinary and necessary business expenses. This decision clarified that corporations cannot reduce their taxable income by buying back their own shares unless it can be proven that this action is an essential part of day-to-day operations or required for survival.

In the dissenting opinion for the Angelus Milling Co. v. Commissioner of Internal Revenue case, it was argued that there was a misinterpretation of Section 113(a)(5) and (b)(1)(B) of the Revenue Act by the majority. The dissent believed that these sections should be read in conjunction with each other to determine whether or not property has been acquired through an exchange, rather than treating them as separate entities. They also disagreed with how "property" had been defined in this context - arguing that it should include both tangible and intangible assets such as goodwill or going-concern value which were excluded from consideration by the majority's interpretation. This would mean that if any part of what is received in an exchange consists partly out of something other than money then no gain can be recognized under section 112(b). Therefore, they felt Angelus Milling Company shouldn't have been taxed on their acquisition because they exchanged properties instead of buying outrightly with cash only.