Pierce v. Commissioner
United States Board of Tax Appeals
Petitioner paid in 1933 an amount of $24,506.46 on certain indebtedness of his son which he had guaranteed when the latter was solvent in order to prevent the sale of stock held by the creditor as collateral. Held, petitioner is entitled to a deduction in 1933 for the amounts so paid as a debt ascertained to be worthless and charged off in that year.
1Opinion of the Court
*1263OPINION.
Hill:
We are called on to decide here whether the petitioner’s payment of $24,506.46 on his guarantee of the indebtedness of his son is (1) a contribution to the capital cost of stock held by the petitioner which he sought to protect by his guarantee, (2) a gift to his son made when the business' affairs of the son did not warrant a prudent loan, or (3) a loan made to his son, ascertained by the petitioner to be worthless in 1933 and charged off at that time.
The first position we consider untenable here. The amounts paid out on his guarantees by the petitioner did not go into the…
2Cited by10 opinions
- Fox v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1951
- Lieberfarb v. CommissionerUnited States Tax Court · 1973
- Estate of J. F. Ames v. CommissionerUnited States Tax Court · 1946
- Estate of Elkins v. United StatesDistrict Court, S.D. Texas · 1978
- Estate of Leavitt v. CommissionerUnited States Tax Court · 1988
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