Ostrom v. Commissioner
United States Tax Court
In his capacity as president and general manager of the company, petitioner made fraudulent misrepresentations concerning the company's financial status. An investor purchased stock of the company in reliance on petitioner's misrepresentations. The company subsequently went out of business, and the investor sued petitioner for damages. In a jury trial, the investor won an award of $ 25,000 for damages from petitioner.
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In his capacity as president and general manager of the company, petitioner made fraudulent misrepresentations concerning the company's financial status. An investor purchased stock of the company in reliance on petitioner's misrepresentations. The company subsequently went out of business, and the investor sued petitioner for damages. In a jury trial, the investor won an award of $ 25,000 for damages from petitioner. Petitioner satisfied the judgment by assigning a second mortgage worth $ 24,700 to the investor. Held, under sec. 162(a), I.R.C. 1954, petitioner may deduct $ 24,700 as an…
1Opinion of the Court
Hall, Judge:
Respondent determined a $9,878 deficiency in petitioners’ 1976 income tax. In an amended answer, respondent increased the deficiency to $10,392. The sole issue is whether petitioners are entitled to deduct a payment made in settlement of a judgment rendered against petitioner C. A. Ostrom for alleged fraudulent misrepresentations.
FINDINGS OF FACT
Some of the facts have been stipulated and are found accordingly.
C. A. (petitioner) and Mollie J. Ostrom,1 husband and wife, resided in Palm Beach County, Fla., when they filed their petition.
In 1968, petitioner and two others formed Pan…
2Cases cited10 opinions
- Commissioner v. HeiningerSupreme Court of the United States · 1943
- United States v. GilmoreSupreme Court of the United States · 1963
- Primuth v. CommissionerUnited States Tax Court · 1970
- Helvering v. HamptonCourt of Appeals for the Ninth Circuit · 1935
- Alex v. CommissionerUnited States Tax Court · 1978
5 more not listed; retrieve them via the Exa API.
3Cited by9 opinions
- Lucas v. CommissionerUnited States Tax Court · 1982
- Fred W. Steffens and Margaret T. Steffens v. Commissioner of Internal Revenue ServiceCourt of Appeals for the Eleventh Circuit · 1983
- Dileonardo v. CommissionerUnited States Tax Court · 2000
- Graphic Business Systems, Inc. v. CommissionerUnited States Tax Court · 1982
- Lynch v. CommissionerUnited States Tax Court · 1983
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