Nat'l Bank of Commerce v. Commissioner
United States Board of Tax Appeals
1. In 1933 six small banks, almost all of the stock of which was held by a bank holding company, transferred all of their assets to petitioner, a larger bank also controlled by the holding company, pursuant to a plan of reorganization looking to the operation of the transferor banks as branches of petitioner, the transferee bank.
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1. In 1933 six small banks, almost all of the stock of which was held by a bank holding company, transferred all of their assets to petitioner, a larger bank also controlled by the holding company, pursuant to a plan of reorganization looking to the operation of the transferor banks as branches of petitioner, the transferee bank. Preliminary to the transfers all of the banks charged off their books not only worthless debts but also debts which had value but might be subject to criticism by banking authorities. Petitioner assumed the liabilities of the transferor banks, which liabilities were…
1Opinion of the Court
*75OPINION.
Keen:
The primary question presented by this proceeding is whether the recoveries of debts charged off as worthless in previous years by a bank on its own initiative constitute taxable income in the year of their recovery by such bank, even though the prior charge-off accomplished no reduction in tax liability in the year in which they were charged off.
It is now well settled that where amounts previously deducted from income for losses, expenses, bad debts, taxes, etc., which effect an offset of taxable income, are recovered in subsequent years, such recoveries “should be reported as a…
2Cited by29 opinions
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- Ridge Realization Corp. v. CommissionerUnited States Tax Court · 1966
- Philadelphia Nat. Bank v. RothensiesDistrict Court, E.D. Pennsylvania · 1942
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