First National Bank v. United States

The question presented in this case is whether plaintiff is entitled to a deduction from gross income in 1934 for certain bad debts under the provisions of section 23 (k) of the revenue act of 1934 which provides for the allowance of a deduction for “Debts ascertained to be worthless and charged off within the taxable year * * (48 Stat. 680, 689.)

The statute provides two conditions precedent for the allowance of a bad-debt deduction, the determination of worthlessness and a charge-off within the taxable year.

This plaintiff is a national bank subject to supervision by Federal authorities and…