James J. Caligiuri and Rose M. Caligiuri v. Commissioner of Internal Revenue

BRIGHT, Circuit Judge.

In this appeal from a decision of the United States Tax Court, 1 taxpayers James J. Caligiuri and Rose Caligiuri claim that the tax court erred (1) in denying them a deduction for a nonbusiness bad debt in the amount of $7,500 for the year 1958, see Int.Rev.Code of 1954, § 166(d); and (2) in determining that, when taxpayers sold their interest in Baxter Milling Service to a third-party buyer in 1961 for $87,500, and received as consideration $20,000 in cash and $67,500 in par value preferred stock in a new corporation organized by the buyer, the value of the preferred…