Walet v. Commissioner
United States Tax Court
1. Where petitioner, president of a corporation, realized long-term capital gain from sale of the corporation's stock in 1950 and was subsequently adjudicated liable to restore a portion of his profits under section 16 (b) of the Securities Exchange Act of 1934, held, payment of the judgment in 1954 does not entitle petitioner to reopen the taxable year 1950 so as to claim a capital loss carryover from 1950 to 1951. 2. Petitioner sporadically devoted a small percentage of…
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1. Where petitioner, president of a corporation, realized long-term capital gain from sale of the corporation's stock in 1950 and was subsequently adjudicated liable to restore a portion of his profits under section 16 (b) of the Securities Exchange Act of 1934, held, payment of the judgment in 1954 does not entitle petitioner to reopen the taxable year 1950 so as to claim a capital loss carryover from 1950 to 1951. 2. Petitioner sporadically devoted a small percentage of his time to seeking out, investigating, and negotiating for personal profitable "deals" in oil and other natural…
1Opinion of the Court
OPINION.
Raum, Judge:
1. Adjustment with respect to liability u/nder section 16 (&). — Petitioner is not entitled to reopen the taxable years 1950 and 1951 in order to reflect the amount of his 1954 payment of a judgment rendered against him under section 16 (b) of the Securities Exchange Act of 1934. Our conclusion in this regard is grounded in two fundamental concepts of tax accounting, the claim of right doctrine and the annual accounting period.
The claim of right doctrine was thus stated by Mr. Justice Brandeis in North American Oil Consolidated v. Burnet, 286 U. S. 417, 424:
If a taxpayer…
2Cases cited17 opinions
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- Healy v. CommissionerSupreme Court of the United States · 1953
- Smolowe v. Delendo CorporationCourt of Appeals for the Second Circuit · 1943
- United States v. LewisSupreme Court of the United States · 1951
12 more not listed; retrieve them via the Exa API.
3Cited by75 opinions
- Challenge Mfg. Co. v. CommissionerUnited States Tax Court · 1962
- Richmond Television Corporation v. United StatesCourt of Appeals for the Fourth Circuit · 1965
- Stolk v. CommissionerUnited States Tax Court · 1963
- Koons v. CommissionerUnited States Tax Court · 1961
- Eugene H. Walet, Jr. And Celia R. Walet v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1959
70 more not listed; retrieve them via the Exa API.