In the case of Lasky et vir v. Commissioner of Internal Revenue (1956), the Supreme Court ruled on a dispute regarding tax deductions for expenses related to film production. The petitioners, Mr. and Mrs. Jesse Lasky, were involved in producing films through an independent corporation where they held majority shares. They claimed certain costs as business expenses deductible from their gross income under section 23(a)(1)(A) of the Internal Revenue Code, which allows deductions for "ordinary and necessary" business expenses. The Commissioner disallowed these claims arguing that such expenditures should be capitalized over the life expectancy of each film rather than deducted immediately from taxable income because they produced significant future benefits beyond one year's time. The Tax Court agreed with the commissioner’s decision but was reversed by Ninth Circuit court stating that such costs are currently deductible as ordinary and necessary business expense under section 23(a)(1)(A). However, upon reaching Supreme Court it upheld Tax court’s decision agreeing with commissioner's interpretation that these costs must be capitalized since they create or enhance what is essentially a separate asset expected to produce substantial revenue beyond current taxable year.

In the dissenting opinion for Lasky et Vir v. Commissioner of Internal Revenue, it was argued that the majority's decision to disallow tax deductions for expenses incurred in producing a film script went against established principles of tax law. The dissenting justices believed that these costs should be considered ordinary and necessary business expenses, deductible under section 23(a)(1)(A) of the Internal Revenue Code. They pointed out that such expenditures were made with an expectation of profit and thus constituted a risk inherent in the trade or business carried on by taxpayers involved in filmmaking industry. Furthermore, they disagreed with majority’s interpretation regarding capitalization rules applied to this case as they felt it contradicted previous court rulings where similar costs had been allowed as deductions when there was no guarantee those would result into successful products or services.