o is normally taxable only on the
receipt of interest payments cannot escape taxation thereon by giving
away his right to such income in advance of payment. When "the taxpayer
does not receive payment of income in money or property, realization may
occur when the last step is taken by which he obtains the fruition of
the economic gain which has already accrued to him." Hence an owner of
bonds, reporting on the cash receipts basis, who clipped interest
coupons therefrom before their due date and gave them to his son, was
held to have realized taxable income in the amount of said coupons,
notwithstanding that his son had collected them upon maturity later in
the year.[35]

DIMINUTION OF LOSS, NOT INCOME

Mere diminution of loss is neither gain, profit, nor income.
Accordingly, one who in 1913 borrowed a sum of money to be repaid in
German marks and who subsequently lost said money in a business
transaction cannot be taxed on the curtailment of debt effected by
using depreciated marks in 1921 to settle a liability of $798,144 for
$113,688, the "saving" having been exceeded by a loss on the entire
operation.[36]

DATES APPLICABLE IN COMPUTATION OF TAXABLE GAINS

With a frequency that for obvious reasons is progressively diminishing,
the Court has also been called upon to resolve questions as to whether
gains, realized after 1913, on transactions consummated prior to
ratification of the Sixteenth Amendment are taxable, and if so, how such
tax is to be determined. The Court's answer generally has been that if
the gain to the person whose income is under consideration became such
subsequently to the date at which the amendment went into effect;
namely, March 1, 1913, and is a real and not merely an apparent gain,
said gain is taxable. Thus, one who purchased stock in 1912 for $500
could not limit his taxable gain to the difference between $695, the
value of the stock on March 1, 1913 and $13,931, the price obtained on
the sale thereof in 1916; but was obliged to pay tax on the entire gain,
that is, the difference between the original purchase price and the
proceeds of the sale.[37] Conversely, one who acquired stock in 1912 for
$291,600 and who sold the same in 1916 for only $269,346, incurred a
loss and could not be taxed at all, notwithstanding the fact that on
March 1, 1913, his stock had depreciated to $148,635.[38] On the other
hand, although the difference between the amount of life insurance
premiums, paid as o