In the case of Brown Shoe Co., Inc. v. Commissioner of Internal Revenue, 1949, the U.S Supreme Court was tasked with determining whether or not a corporation could deduct from its gross income payments made to its employees under a profit-sharing plan. The court ruled in favor of Brown Shoe Company, stating that these payments were ordinary and necessary business expenses and therefore deductible under section 23(a)(1)(A) of the Internal Revenue Code. This decision clarified tax law regarding employee benefits and established precedent for corporations seeking to provide such benefits while also maintaining their financial health.

In the dissenting opinion for Brown Shoe Co., Inc. v. Commissioner of Internal Revenue, it was argued that the majority's interpretation of Section 117(j) of the Internal Revenue Code was too narrow and restrictive. The dissenting justices believed that this section should be interpreted to include all property used in a trade or business, not just real estate and depreciable property as determined by the majority. They contended that Congress intended for this provision to apply broadly to prevent double taxation on gains from sales of business assets, regardless if they are tangible or intangible properties such as goodwill or going concern value associated with a company’s reputation and customer relationships which were sold by Brown Shoe Co.. Therefore, they disagreed with the decision to tax Brown Shoe Company on its sale of trademarks and trade names under ordinary income rates instead of capital gain rates.