Berwind v. Commissioner of Internal Revenue

Petitioner, a director, depositor and shareholder in a trust company, loaned money to that company along with other “contracting stockholders” for the purpose of remedying an impairment to its capital. The loan became worthless in 1946. The trust company was affiliated with The Berwind-White Coal Mining Company. Petitioner was an officer and director in the latter corporation and in its other affiliated and subsidiary companies.

He claimed a deduction in 1946 for the worthless debt as a loan incurred in his trade or business of being an officer and director in Berwind-White, its subsidiaries…