In the 1933 case of Helvering, Commissioner of Internal Revenue v. Duke et al., the United States Supreme Court dealt with issues related to income tax law. The respondents, a husband and wife, had filed separate income tax returns for 1928 and claimed losses from sales of stock as deductions. However, these stocks were purchased by their joint account but paid solely by the husband's funds. The Commissioner disallowed these deductions on grounds that they were not "realized" losses since there was no change in beneficial ownership when stocks moved between accounts owned by spouses who lived together and filed separately. The court held that under Section 23(r) (1) & (2) of the Revenue Act of 1928 which allows taxpayers to deduct losses from sales or exchanges made to someone other than a spouse; such transfers between spouses do not count as 'sales' or 'exchanges'. Therefore, any resulting loss cannot be deducted for federal income tax purposes because it is unrealized due to lack of change in beneficial ownership. This ruling established an important precedent regarding taxation laws applicable to transactions involving marital property rights.

In the dissenting opinion for Helvering v. Duke, Justice Cardozo argued that the majority's interpretation of tax law was too broad and could lead to unfair results. He believed that a taxpayer should not be taxed on income they never actually received or had control over, as it contradicts the fundamental principle of taxation based on ability to pay. In this case, he disagreed with taxing Mrs. Duke for her husband’s unpaid salary because she did not have any actual possession or control over those funds during his lifetime nor at his death due to their marital property laws in Texas where they resided; hence she didn't derive any economic benefit from them either directly or indirectly. Therefore, according to him such an amount cannot be considered part of her gross estate upon which federal estate taxes can be levied posthumously.