In the case of Cornelii v. Moore, Collector of Internal Revenue in 1921, the Supreme Court ruled on a dispute regarding income tax liability for profits made from selling land that had appreciated in value. The plaintiff, Cornelii, argued that he should not be liable to pay taxes on his profit because it was derived from capital and not income. However, the court disagreed with this argument stating that gains or profits made through transactions involving property are considered as part of gross income under U.S law and therefore subject to taxation. This decision established an important precedent by clarifying what constitutes taxable income under federal law.

The dissenting opinion in the case of Cornelii v. Moore, Collector of Internal Revenue, argued that the majority's decision to uphold a tax on income derived from property held in trust was incorrect. The dissenters believed that this interpretation of the Sixteenth Amendment expanded its scope beyond what was intended by Congress and violated principles of federalism by intruding upon state powers to regulate trusts and estates. They contended that income from a trust should not be considered as personal income for taxation purposes because it is not directly controlled or received by an individual but rather managed collectively under fiduciary responsibility. Therefore, they concluded that such revenue falls outside the purview of federal taxation authority as defined in the Constitution.