Loewi v. Ryan

I agree that the judge’s charge was' somewhat confusing as to “good faith” and the like. But I would remand for a new trial solely on the issue of the so-called good faith of the taxpayer in disposing of the collateral in the year that he seeks to take the bad-debt deduction. For I disagree with my colleagues in the following respect: I think that, so long as the taxpayer refrains from foreclosing on the collateral because of what he, in good faith, regards as valid business considerations (other than tax reduction), the debt is not to be deemed worthless; the taxpayer’s subjective reactions,…