Helvering v. Wilmington Trust Co‪.‬

Taxpayer maintained several security accounts with her brokers. In computing her income tax for 1934 and 1935 taxpayer deducted the sums charged as dividends to her short account from the dividend credits on her long accounts. The Commissioner of Internal Revenue assessed a deficiency for the amount of the deduction on the theory that the accounts were separate. The Board of Tax Appeals refused to uphold the deficiency because it viewed the separation of taxpayers accounts into long and short accounts as a mere bookkeeping device. It also held that if it were wrong in this respect, taxpayer might still deduct as ordinary and necessary business expenses the dividends charged on the short account.