Whipple v. Commissioner

Section 23(k)(1) of the Internal Revenue Code of 1939 1 provides for the deduction in full of worthless debts other than nonbusiness bad debts while § 23 (k) (4) restricts nonbusiness bad debts to the treatment accorded losses on the sale of short-term capital assets. 2 The statute defines a nonbusiness bad debt in part as “a debt . . . other than a debt the'loss from the worthlessness of which is incurred in the taxpayer’s trade or busi ness.” § 23 (k)(4). The question before us is whether petitioner’s activities in connection with several corporations in which he holds controlling interests…