In the case of Brewster v. Gage, Collector of Internal Revenue, 1929, the United States Supreme Court ruled on a dispute regarding income tax deductions. The petitioner, Mrs. Brewster had inherited property from her late husband and sold it in 1917 for less than its appraised value at his death in 1916. She claimed a deduction for this loss on her federal income tax return but was denied by the Commissioner of Internal Revenue who argued that she had not incurred any actual economic loss because she did not purchase or improve the property herself. The court sided with Mrs. Brewster stating that under Section 214(a)(5) of the Revenue Act of 1918 which allows deductions for losses sustained during taxable year and "not compensated by insurance or otherwise", there is no requirement that taxpayer must have purchased or improved property to claim such deduction when they sell it at a loss. Therefore, even though Mrs.Brewster didn't personally invest money into purchasing or improving said properties before selling them off at lower prices than their initial valuation upon inheritance; she still suffered an economic disadvantage due to these transactions hence should be allowed to deduct those losses from her taxable income as per existing laws.

In the dissenting opinion for Brewster v. Gage, it was argued that the majority's interpretation of Section 219 (b) and (h) of the Revenue Act of 1924 was incorrect. The dissenting justices believed that these sections should be read together to mean that a taxpayer who has made an overpayment can file a claim for credit or refund within four years from when they filed their tax return. They disagreed with the majority's view that taxpayers must wait until they have paid their taxes before filing such claims, arguing this would lead to unnecessary delays and complications in tax administration. Furthermore, they contended that if Congress had intended such a requirement, it would have explicitly stated so in the statute.