First Nat'l Bank v. Commissioner
United States Board of Tax Appeals
After default of a note secured by shares, the lender took the shares into its asset account at their fair market value and charged off as worthless the amount of the loan in excess of such value. For computing gain on the subsequent sale of the shares, basis held to be their value when taken over.
1Opinion of the Court
OPINION.
Sternhagen :
The Commissioner determined deficiencies of $1,719.77 in income tas and $888.52 in excess profits tax for 1936, and $226.82 in income tax for 1937. The petitioner seeks a reduction of the profit from the sale of securities through an increase in the basis. The principal facts are stipulated and are found as agreed.
The petitioner in 1933 loaned $5,766.17 to Shirey on his note with interest and took 150 shares of General Refractories Co. as collateral. The note was defaulted and in 1935 petitioner took the collateral, which was then worth $2,250. Petitioner charged this…
2Cited by5 opinions
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