Ames v. Commissioner
United States Board of Tax Appeals
A taxpayer owning all of the stock of a corporation, not a personal service corporation, may not deduct under the Revenue Act of 1918, as losses sustained in the business or as debts ascertained to be worthless, advances made to such corporation in the amount of the losses actually sustained by the corporation during a year so long as the corporation has net assets from which recovery in part is possible.
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A taxpayer owning all of the stock of a corporation, not a personal service corporation, may not deduct under the Revenue Act of 1918, as losses sustained in the business or as debts ascertained to be worthless, advances made to such corporation in the amount of the losses actually sustained by the corporation during a year so long as the corporation has net assets from which recovery in part is possible. Individual business expenses cleared through the books of a corporation are deductible on the part of the individual to whose business they relate.
1Opinion of the Court
*65OPINION.
James:
The taxpayer in his appeal relies upon the following propositions:
1. That the corporation, Office of Winthrop Ames, Inc., had no legal existence by reason of the fact that two directors were not in fact owners of capital stock of the corporation;
2. That the corporation, if legally organized, was in fact dormant during the years in question and was merely a name through which ■Winthrop Ames carried on his business of producing plays;
3. That Winthrop Ames by the manner in which the affairs of the corporation were conducted and through his constant assumption of the liabilities of…
2Cases cited3 opinions
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Houston Belt & Terminal Ry. Co. v. United StatesCourt of Appeals for the Fifth Circuit · 1918
- People Ex Rel. Waclark Realty Co. v. WilliamsNew York Court of Appeals · 1910
3Cited by7 opinions
- Southern Pacific Transp. Co. v. CommissionerUnited States Tax Court · 1980
- Ames v. CommissionerUnited States Board of Tax Appeals · 1924
- Ames v. CommissionerUnited States Board of Tax Appeals · 1933
- Figgie International, Inc. v. CommissionerUnited States Tax Court · 1985
- Portland R., L. & P. Co. v. CommissionerUnited States Board of Tax Appeals · 1925
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