Eastern New Jersey Power Co. v. Commissioner
United States Board of Tax Appeals
Petitioner had a claim against a bank for unpaid deposits. The bank had been closed in 1931 and was reopened in April 1933, under a plan approved by the state commissioner of banking. Petitioner signed the agreement for reopening and received participation certificates entitling it to receive payments from earnings and liquidation of certain assets up the amount of the unpaid deposit. In 1933 petitioner received payment of 10 percent of the deposit.
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Petitioner had a claim against a bank for unpaid deposits. The bank had been closed in 1931 and was reopened in April 1933, under a plan approved by the state commissioner of banking. Petitioner signed the agreement for reopening and received participation certificates entitling it to receive payments from earnings and liquidation of certain assets up the amount of the unpaid deposit. In 1933 petitioner received payment of 10 percent of the deposit. Petitioner "ascertained" the claim to be worthless and charged it off on its books as a bad debt at the end of 1933. Held, petitioner could not…
1Opinion of the Court
*1039OPINION.
Haeron:
There is no dispute that petitioner charged off on its books the debt as worthless. There is no question that the item was a debt. A bank deposit creates a debtor-creditor relation. The sole question is whether the petitioner’s ascertainment of worthlessness of the debt occurred in the same year that the debt in fact became worthless. The question here is a fact question upon which the burden of proof is on the petitioner.
A taxpayer is not expected to be too optimistic. United, States v. White Dental Manufacturing Co., 274 U. S. 398, 403. Neither should he be too pessimistic…
2Cases cited1 opinion
- United States v. S. S. White Dental Manufacturing Co.Supreme Court of the United States · 1927
3Cited by10 opinions
- Milenbach v. CommissionerUnited States Tax Court · 1996
- Helvering v. SmithCourt of Appeals for the Fourth Circuit · 1942
- Perrotto v. CommissionerUnited States Tax Court · 1977
- Eastern New Jersey Power Co. v. CommissionerUnited States Board of Tax Appeals · 1938
- Fidelity & Deposit Co. v. MagruderDistrict Court, D. Maryland · 1943
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