Deely v. Commissioner
United States Tax Court
1. Since 1944 petitioner, with others, has organized and financed numerous corporations and other business entities. In two of the taxable years in issue, petitioner claimed as business bad debt deductions amounts owed to him by two insolvent corporations which he had organized.
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1. Since 1944 petitioner, with others, has organized and financed numerous corporations and other business entities. In two of the taxable years in issue, petitioner claimed as business bad debt deductions amounts owed to him by two insolvent corporations which he had organized. Held, petitioner was not engaged in the separate business of promoting, financing, managing, and organizing businesses, and the above worthless debts owing to him are deductible only as nonbusiness bad debts under sec. 166(d), I.R.C. 1954. Held, further, petitioner's subsequent recovery of a previously deducted bad…
1Opinion of the Court
Drennen, Judge:
Respondent determined the following deficiencies in petitoners’ income taxes:
Year Deficiency
1968. 1$41,445.00
1972. 308.52
Year Deficiency
1973. $4,620.96
1974. 4,815.84
Due to concessions, the issues remaining for our resolution are as follows:(1) Whether debts owing to petitioner from two corporations and becoming worthless in 1971 and 1973 are to be characterized as business bad debts under section 166(a), I.R.C. 1954,2 or nonbusiness bad debts under 166(d);(2) If we determine that the debts are properly characterized under section 166(a), is the debt owing by one corporation…
2Cases cited27 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- New Colonial Ice Co. v. HelveringSupreme Court of the United States · 1934
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Higgins v. CommissionerSupreme Court of the United States · 1941
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- La Staiti v. CommissionerUnited States Tax Court · 1980
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