In the 1939 case of Helvering v. Bruun, the United States Supreme Court ruled that a property owner must pay income tax on any increase in value to their property during their ownership, even if they have not sold or otherwise realized this gain. The case involved a landlord who had leased his building for 99 years and received it back with improvements made by the tenant at the end of lease term. The IRS argued that these improvements constituted taxable income for Mr. Bruun, while he contended that there was no realization event triggering taxation under federal law because he did not sell or dispose of his property but merely took possession again after lease termination. However, Justice Reed delivered an opinion favoring Commissioner Guy T. Helvering's argument stating that receipt of improved premises by a lessor from lessee upon termination is considered as taxable gain under Internal Revenue Code.

In the dissenting opinion for Helvering v. Bruun, Justice Black disagreed with the majority's ruling that a property owner must pay income tax on an increase in property value when they regain possession after a lease ends. He argued that this interpretation of the law was incorrect and unfair to taxpayers. According to him, there is no actual gain until the taxpayer sells or disposes of their property in some way; simply regaining possession does not constitute a taxable event under existing laws at that time. Furthermore, he contended that taxing such unrealized gains could lead to financial hardship for taxpayers who might be forced to sell their properties just to pay taxes on theoretical increases in value.