Wilmore SS Co. v. Commissioner of Internal Revenue
Court of Appeals for the Second Circuit
On September 12, 1917, the Wilmore, an ocean-going collier belonging to the petitioner, was torpedoed and sunk by a German submarine.
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On September 12, 1917, the Wilmore, an ocean-going collier belonging to the petitioner, was torpedoed and sunk by a German submarine. The taxpayer recovered in that year $1,750,000 marine and war risk insurance for the loss and reported the difference between the original cost of the steamer (less depreciation) and the amount of the insurance paid, as part of its gross income for the year 1917. After the organ *668 ization of the German-American Mixed Claims Commission, the petitioner filed a claim for the loss sustained through the destruction of the steamer, and on February 17, 1926, the…
1Opinion of the CourtAugustus N. Hand, Circuit Judge
(after stating the facts as above).
The taxpayer kept its books on the accrual basis and properly entered for 1928 the amount awarded to it that year by the Mixed Claims Commission under the Settlement of War Claims Act of 1928 (45 Stat. 254). Automobile Ins. Co. v. Commissioner, 72 F.(2d) 265 (C. C. A. 2).
The questions before us are: (1) Whether the moneys amounting to the net sum of $312,157.60 paid to the taxpayer in August, 1928, were derived from property “involuntarily converted” in 1917 when the Wilmore was torpedoed; and (2) whether these moneys were forthwith in good faith expended in…
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