Fahnestock v. Commissioner
United States Tax Court
1. The retroactive amendment of the first sentence of section 23 (k) (1) of the Revenue Act of 1938 by sections 124 (a) and (d) of the Revenue Act of 1942 does not violate the Fifth Amendment to the Constitution, and applies to the deduction of partial bad debts in the computation of petitioners' decedent's income taxes for the period January 1 to October 11, 1939, the date of decedent's death. 2. On the facts, petitioners are entitled thereunder to the deduction of $ 32,923…
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1. The retroactive amendment of the first sentence of section 23 (k) (1) of the Revenue Act of 1938 by sections 124 (a) and (d) of the Revenue Act of 1942 does not violate the Fifth Amendment to the Constitution, and applies to the deduction of partial bad debts in the computation of petitioners' decedent's income taxes for the period January 1 to October 11, 1939, the date of decedent's death. 2. On the facts, petitioners are entitled thereunder to the deduction of $ 32,923 as that part of a debt due the decedent which became worthless during that period.
1Opinion of the Court
OPINION.
Leech, Judge:
Throughout the trial it was claimed, on behalf of the respondent, that the petitioners had claimed a “total” and not a “partial” bad debt deduction. On brief it is apparently conceded that the deduction involved is a partial bad debt deduction and was so claimed on the return. We proceed on that assumption.
The petitioners contend they are entitled to a partial bad debt deduction, in the sum of $147,666.75, as so claimed. They base this contention on the premise that section 23 (k) (1) of the Revenue Act of 1938, which was in effect when their return for the decedent for…
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