In the 1934 case of Helvering v. Powers, the U.S Supreme Court ruled on a matter concerning federal estate tax law. The issue at hand was whether or not stock dividends should be included in gross estate for taxation purposes if they were received after death but before distribution to beneficiaries. The court held that such dividends are indeed part of the gross estate and subject to federal taxation under Section 302 (d) of Revenue Act 1926, even though they were received posthumously by an executor or administrator rather than directly by the deceased person prior to their death. This decision clarified how certain types of income generated during probate proceedings should be treated for tax purposes.

In the dissenting opinion for Helvering v. Powers, Justice Stone argued that the majority's interpretation of Section 302(c) of the Revenue Act was incorrect. He believed that this section should not be read as a limitation on what constitutes "income," but rather as an administrative provision to prevent double taxation. According to him, it is clear from both legislative history and previous court decisions that Congress intended all income derived from any source whatsoever to be taxed unless specifically exempted by law. Therefore, he disagreed with the majority's decision to exclude certain dividends received by a trust beneficiary from gross income based on their interpretation of Section 302(c). Instead, he would have held these dividends taxable under general principles of tax law because they represented an economic gain for the beneficiary.