Erik M. Jensen


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.


ation, United States v. Hughes Properties, United States v. General Dynamics, "All events" Test, Future Liabilities

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Tax Notes

Publication Information

32 Tax Notes 911 (1986)

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Tax Law Commons


COinS Erik M. Jensen Faculty Bio