Grenada Bank v. Commissioner
United States Board of Tax Appeals
1. Losses by embezzlement to the extent not compensated for by recoveries are deductible, not as bad debts determined to be worthless and charged off during the taxable year, but as losses sustained. 2. Amounts paid as interest on the obligations of the taxpayer may not be deducted as losses sustained. 3. The amounts recovered with respect to the embezzlements were generally recovered with reference to the total amount embezzled and without regard to any particular item or…
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1. Losses by embezzlement to the extent not compensated for by recoveries are deductible, not as bad debts determined to be worthless and charged off during the taxable year, but as losses sustained. 2. Amounts paid as interest on the obligations of the taxpayer may not be deducted as losses sustained. 3. The amounts recovered with respect to the embezzlements were generally recovered with reference to the total amount embezzled and without regard to any particular item or items embezzled. In computing the loss deduction for the taxable year the respondent allocated the recoveries to the…
1Opinion of the Court
*1292OPimoN.
TURNER:
A motion has been filed to amend the petition to conform to the proof offered at the hearing. The amendment proposed alleges that the principal amount embezzled in 1928 was $15,750, instead of $9,960, as originally alleged. The respondent has based the discussion in his brief on the figures shown in the proposed amendment and the motion to amend has been granted.
The petitioner contends, first, that the issue is one of bad debt deductible in full in the year 1928, and not a question of losses in the years in which the acts of embezzlement occurred. On the facts *1293here this…
2Cited by5 opinions
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- Boston Consol. Gas Co. v. CommissionerUnited States Board of Tax Appeals · 1941
- Grenada Bank v. CommissionerUnited States Board of Tax Appeals · 1935
- Haskell v. CommissionerUnited States Tax Court · 1944