Hughes Properties and General Dynamics: The Supreme Court, the All Events Test, and the 1984 Tax Act

8 Pages Posted: 6 Mar 2009

See all articles by Erik M. Jensen

Erik M. Jensen

Case Western Reserve University School of Law

Abstract

This article discusses United States v. Hughes Properties, a 1986 case in which the Supreme Court blessed an accrual-basis taxpayer's current deduction for amounts guaranteed as payoffs on progressive slot machines but for which no winner had yet been determined. The author notes that, had the case been governed by section 461(h) of the Internal Revenue Code, as it was amended by the 1984 Tax Reform Act, the deductions would have been deferred. He speculates about the Supreme Court's willingness to decide an issue rendered moot by subsequent legislation, and ponders the effect that the decision in Hughes Properties will have on United States v. General Dynamics, a case for which the Court had recently granted certiorari.

Keywords: Taxation, United States v. Hughes Properties, United States v. General Dynamics, "All events" Test, Future Liabilities

JEL Classification: K34

Suggested Citation

Jensen, Erik M., Hughes Properties and General Dynamics: The Supreme Court, the All Events Test, and the 1984 Tax Act. 32 Tax Notes, Vol. 32, p. 911, 1986. Available at SSRN: https://ssrn.com/abstract=1354823

Erik M. Jensen (Contact Author)

Case Western Reserve University School of Law ( email )

11075 East Boulevard
Cleveland, OH 44106-7148
United States
216-368-3613 (Phone)
216-368-2086 (Fax)

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