Winter Garden, Inc. v. Commissioner
United States Board of Tax Appeals
1. Where one purchased a going business intending to continue its operation as it then stood, but within a few days found it necessary to completely after and remodel the plant, which resulted in the scrapping or demolition of most of the equipment, held, the cost of the scrapped equipment constitutes a deductible loss under section 234(a)(4) of the Revenue Act of 1921. 2. In determining the value of such equipment the judgment of corporate officers experienced in such…
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1. Where one purchased a going business intending to continue its operation as it then stood, but within a few days found it necessary to completely after and remodel the plant, which resulted in the scrapping or demolition of most of the equipment, held, the cost of the scrapped equipment constitutes a deductible loss under section 234(a)(4) of the Revenue Act of 1921. 2. In determining the value of such equipment the judgment of corporate officers experienced in such values is entitled to weight.
1Opinion of the Court
*72OPINION.
MaRqxtette:
The petitioner bases its claim for the deduction of $15,000 as a loss upon section 234(a) (4) of the Revenue Act of 1921. This section provides that in computing net income there shall be allowed as a deduction losses sustained during the taxable year and not compensated for by insurance or otherwise, if incurred in trade or business.
The respondent has denied the claim on the ground that it is unreasonable to suppose a group of men would conduct their business affairs in the manner in which petitioner bought and conducted the Roma Cafe. He therefore allocated $55,000 of the…
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