Velvet O'Donnell Corp. v. United States

OPINION

COLAIANNI, Judge:

This case of first impression is before the court on defendant’s motion for partial summary judgment. Generally, the question presented is the effect of Treas.Reg. § 1.1502-14(d)(l), T.D. 6909, 1967-1, C.B. 240, on a taxpayer’s entitlement to a bad debt deduction. Particularly at issue is whether a loss due to the partial worthlessness of the debt of another corporation is, under consolidated return regulations, an allowable deduction on the consolidated return in the year of affiliation where the companies became affiliated after the bad debt was determined partially…