Davenport v. Commissioner
United States Tax Court
Greenbelt derived more than 50 percent of its gross receipts from interest. Held: Greenbelt was not largely an operating company. Its stock is therefore not sec. 1244, I.R.C. 1954, stock, and losses thereon are not sec. 1244, I.R.C. 1954, losses. Sec. 1.1244(c)-1(g)(2), Income Tax Regs., followed. Petitioner's purchases of Greenbelt stock and loans to Greenbelt were motivated by investment reasons.
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Greenbelt derived more than 50 percent of its gross receipts from interest. Held: Greenbelt was not largely an operating company. Its stock is therefore not sec. 1244, I.R.C. 1954, stock, and losses thereon are not sec. 1244, I.R.C. 1954, losses. Sec. 1.1244(c)-1(g)(2), Income Tax Regs., followed. Petitioner's purchases of Greenbelt stock and loans to Greenbelt were motivated by investment reasons. Held, petitioners were not entitled to ordinary loss treatment when the stock and loans became worthless.
1Opinion of the Court
Wiles, Judge:
Respondent determined the following deficiencies in petitioners’ income taxes:
Deficiency Year Deficiency S ^. $1,710.99 1970 .$8,584.39 OO Cl rH...2,836.71 1972 . 1,515.45 05 Oi rH
There are three issues: whether petitioners’ loss on Greenbelt Finance, Inc. (hereinafter Greenbelt), stock, purchased in 1959, was a loss on section 12441 stock; whether petitioners are entitled to an ordinary loss deduction under section 165(a) for Greenbelt stock purchased in 1968; and whether petitioners are entitled to a bad debt deduction under section 166(a) for loans made to Greenbelt.
FINDINGS…
2Cases cited17 opinions
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