Paine v. Commissioner
United States Tax Court
Petitioner held stock in 1966 in a corporation. The corporate officers engaged in fraudulent and illegal acts that artificially inflated the value at which the stock was traded and as a result of these acts the stock declined in value, but did not become worthless in 1966. Petitioner owned the stock at the end of the taxable year 1966. Petitioner claimed a theft loss deduction for the value of the stock.
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Petitioner held stock in 1966 in a corporation. The corporate officers engaged in fraudulent and illegal acts that artificially inflated the value at which the stock was traded and as a result of these acts the stock declined in value, but did not become worthless in 1966. Petitioner owned the stock at the end of the taxable year 1966. Petitioner claimed a theft loss deduction for the value of the stock. Held: A theft loss deduction can be sustained only if a theft occurred under the applicable State law. Petitioner has failed to prove that, under Texas law, the misconduct of the corporate…
1Opinion of the Court
OPINION
Wilbur, Judge:
Respondent has determined a deficiency of $19,371 in petitioner’s 1966 Federal income tax. The sole issue presented is whether the petitioner incurred a theft loss within the meanirfgof section 165(c)(3)1 in 1966.
All the facts have been stipulated and the stipulation of facts, together with the exhibits attached thereto, are found accordingly.
During the calendar year 1966 and at the time the petition was filed petitioner resided in Houston, Tex. Petitioner filed an individual income tax return for the taxable year 1966 with the district director of internal revenue at…
2Cases cited13 opinions
- Edwards v. BrombergCourt of Appeals for the Fifth Circuit · 1956
- Henry Schwartz Corp. v. CommissionerUnited States Tax Court · 1973
- Monteleone v. CommissionerUnited States Tax Court · 1960
- Nichols v. CommissionerUnited States Tax Court · 1965
- Vietzke v. CommissionerUnited States Tax Court · 1961
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3Cited by55 opinions
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- Charles P. Adkins and Jane E. Adkins v. United StatesUnited States Court of Federal Claims · 2013
- James W. Williams v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1978
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