
    THE UNITED STATES v. FLANNERY ET AL., EXECUTORS OF THE ESTATE OF JAMES J. FLANNERY, DECEASED
    [59 C. Cls. 719; 268 U. S. 98]
    Judgment was rendered against the United States in the court below. On appeal the judgment was reversed, the Supreme Court deciding:
    1. The revenue act of 1918 provided that net income should include- “ gains ” derived from sales or dealings in property, sections. 212 (a) and 213 (a) ; that there should be allowed as deductions “losses” sustained during the taxable year “incurred in any transaction entered into for profit,” section 214 (a) ; and that “for the purpose of ascertaining the gain derived or loss sustained from the sale or other disposition of property * * * the basis shall be — (1) In the case of property acquired before March 1, 1913, the fair market value of such property as of that date; and (2) In the case of property acquired on or after that date, the cost thereof.” Section 202 (a). Held,;
    
    April 13, 1925.
    (a) That the provisions of the act in reference to the gains derived and the losses sustained from the sale of property acquired before March 1, 1913, were correlative, and that whatever effect was intended to be given to the market value of property on that date in determining taxable gains, a corresponding effect was intended to be given to such market value in determining deductible losses;
    (b) That the act of 1918 imposed a tax and allowed a deduction to the extent only that an actual gain was derived or an actual loss sustained from the investment, and the provision in reference to the market value on March 1, 1913, was applicable only where there was such an actual gain or loss; that is, that this provision was merely a limitation upon the amount of the actual gain or loss that would otherwise have been taxable or deductible. Goodrich v. Edwards, 255 U. S. 527; Walsh v. Brewster, id. 536.
    2. Decisions of this court affecting the business interests of the country should not be disturbed except upon the most cogent reasons.
   Mr. Justice SaNpoed

delivered the opinion of tbe Supreme Court  