Industrial Trust Co. v. Commissioner
United States Tax Court
In 1929 the petitioner made a secured loan to a corporation that became insolvent later in that year and went out of existence in 1933. Prior to 1943 the petitioner acquired ownership of the property it had received as security for the debt. In 1943 the petitioner claimed a worthless debt deduction. Held, the debt became worthless prior to 1943 and the deduction is not allowable for that year. Section 23 (k) (1), Internal Revenue Code.
1Opinion of the Court
OPINION.
Aeundell, Judge:
The petitioner seeks a worthless debt deduction for 1943 for a secured debt incurred by a corporation that became insolvent and went out of business in 1930.
The debt was incurred on January 2,1929, by a corporation referred to herein as Dutee. The amount of the debt was $850,000 evidenced by a demand note and secured by shares of stock valued at $1,076,367.63 at the time the debt was incurred. In 1930, Dutee became insolvent and wound up its affairs without having made any payments on the principal or interest of the note. The existence of Dutee was terminated in…
2Cases cited3 opinions
- Old Colony Trust Associates v. HassettCourt of Appeals for the First Circuit · 1945
- Le Roy v. CommissionerUnited States Tax Court · 1944
- Commissioner of Internal Revenue v. RoyCourt of Appeals for the Second Circuit · 1945
3Cited by1 opinion
- Industrial Trust Co. v. CommissionerUnited States Tax Court · 1952