Nash v. Commissioner
United States Tax Court
Petitioner was president and sole stockholder of three corporations engaged in the production and distribution of flowers. He loaned money to two of the corporations, one of which was liquidated in 1954, leaving $ 50,243.75 unpaid on the debt.
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Petitioner was president and sole stockholder of three corporations engaged in the production and distribution of flowers. He loaned money to two of the corporations, one of which was liquidated in 1954, leaving $ 50,243.75 unpaid on the debt. Held, that the debt was not proximately related to any trade or business conducted by the petitioner as an individual, and section 166 of the Internal Revenue Code of 1954 continues to require a proximate relationship between the debt and a trade or business of the taxpayer if the debt is to qualify for deduction as a business bad debt.
1Opinion of the Court
OPINION.
Turner, Judge:
The respondent determined that the debt of Hentz Greenhouses, on which, by reason of its worthlessness, the 1954 loss was sustained by petitioner, was a nonbusiness debt within the meaning of the statute, not a business debt, and the loss should therefore be treated as a short-term capital loss.
Subsection 166 (a) of the Internal Revenue Code of 19541 provides that debts becoming worthless within the taxable year shall be allowed as a deduction. Subsection 166 (d) 2 provides a special treatment for losses from nonbusiness bad debts, in that they are treated as short-term…
2Cases cited12 opinions
- Burnet v. ClarkSupreme Court of the United States · 1932
- Dalton v. BowersSupreme Court of the United States · 1932
- Campbell v. CommissionerUnited States Tax Court · 1948
- Boissevain v. CommissionerUnited States Tax Court · 1951
- Hill v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1950
7 more not listed; retrieve them via the Exa API.
3Cited by37 opinions
- Aero Rental v. CommissionerUnited States Tax Court · 1975
- Sundstrand Corp. v. CommissionerUnited States Tax Court · 1991
- Johnsen v. CommissionerUnited States Tax Court · 1984
- Pachella v. CommissionerUnited States Tax Court · 1961
- Sales v. CommissionerUnited States Tax Court · 1961
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