In the 1930 case of Burnet, Commissioner of Internal Revenue v. Niagara Falls Brewing Company et al., the U.S Supreme Court ruled on a matter concerning federal income tax law. The Niagara Falls Brewing Company had claimed deductions for losses incurred during the years 1918 and 1919 due to depreciation in value of its brewing facilities following Prohibition laws that made their operation illegal. However, these deductions were denied by the Commissioner of Internal Revenue, leading to an appeal by the company. The Supreme Court held that such losses could not be deducted from taxable income as they did not meet criteria set out under applicable tax legislation at that time - specifically because they were neither "realized" nor "recognized". This decision reinforced existing interpretations regarding what constitutes deductible loss under federal taxation law.

In the dissenting opinion for Burnet v. Niagara Falls Brewing Company, Justice Holmes argued that the majority's decision was inconsistent with previous rulings and principles of tax law. He contended that a corporation should be able to deduct losses from its income taxes when it sells property at a loss, even if it had previously written down the value of that property on its books. According to Holmes, this is because such write-downs are merely estimates and do not reflect actual realized losses until the property is sold. Therefore, he believed corporations should be allowed to adjust their taxable income based on these actual losses rather than estimated ones. This view contrasts with the majority's ruling which held that once a company writes down an asset’s value in its books, any later sale cannot result in further deductions since they've already been accounted for through depreciation.