Tallman v. Commissioner
United States Board of Tax Appeals
Petitioner acted under a power of attorney to manage the finances of an invalid relative of his wife, from 1925 to 1932. In 1932, upon legal determination that the wife's relative was insane, a guardian was appointed, who thereafter threatened to sue petitioner for mismanagement of funds and alleged the power of attorney was invalid.
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Petitioner acted under a power of attorney to manage the finances of an invalid relative of his wife, from 1925 to 1932. In 1932, upon legal determination that the wife's relative was insane, a guardian was appointed, who thereafter threatened to sue petitioner for mismanagement of funds and alleged the power of attorney was invalid. Petitioner paid $15,000 in compromise of the claim and deducted this in his income tax return for 1934, claiming a loss under section 23(e) of the Revenue Act of 1934. Petitioner acted under the power of attorney apart from his employment as a vice president of a…
1Opinion of the Court
*1063OPINION.
HakRon:
It is not disputed that petitioner sustained a loss of $15,100.05 in compromise of a threatened suit for $40,000. The only question presented for our decision is whether the claimed loss is an allowable deduction under the Revenue Act of 1934.1
The respondent disallowed the deduction on his determination that the loss was not incurred in trade or business or in a transaction entered into for profit. From the evidence before us, we think petitioner did not sustain the loss in connection with a business or in a transaction entered into for profit. Petitioner was employed by a bank…
2Cited by12 opinions
- Clement L. Hirsch v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1963
- Grossman & Sons v. CommissionerUnited States Tax Court · 1967
- Cummings v. CommissionerUnited States Tax Court · 1973
- Wallace's Estate v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1939
- Bayles v. FolsumDistrict Court, N.D. West Virginia · 1958
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