In the case of Helvering, Commissioner of Internal Revenue v. Leonard (1939), the U.S Supreme Court was tasked with determining whether a taxpayer could deduct losses from sales of securities in a year other than when they were sold. The respondent, Leonard, had purchased stocks and bonds which later became worthless during the Great Depression. However, he did not claim these as deductions until several years after their worthlessness was established. The court ruled against Leonard's claims for deduction on his 1932 income tax return for losses incurred in 1929 and 1930 due to lack of timely filing within statutory limits set by Section 23(g) and (e) of the Revenue Act of 1928. This decision reinforced that taxpayers must adhere strictly to time limitations imposed by law regarding claiming deductions related to loss or depreciation in value.

In the dissenting opinion for Helvering v. Leonard, Justice Black argued that the majority's decision to tax a widow on her deceased husband's life insurance proceeds was inconsistent with previous court rulings and Congressional intent. He pointed out that Congress had specifically exempted such proceeds from taxation in order to provide financial security for widows and orphans, not as an investment scheme for wealthy individuals. Furthermore, he contended that the Court should defer to Congress' clear legislative intent rather than interpreting ambiguous statutory language in favor of taxation. Finally, he warned against judicial activism by suggesting that it is not within the purview of courts to correct perceived policy mistakes made by legislators.