Henry v. Commissioner
United States Tax Court
Petitioner in 1925 purchased $ 5,000 bonds in corporation A at par. Interest payments on the bonds were defaulted in 1929 and a bondholders' committee was formed. Petitioner deposited her bonds with the committee. In 1935 she determined the bonds to be worthless, wrote them off, and in her income tax return for that year claimed a bad debt loss of $ 5,000, which loss was subsequently disallowed by respondent.
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Petitioner in 1925 purchased $ 5,000 bonds in corporation A at par. Interest payments on the bonds were defaulted in 1929 and a bondholders' committee was formed. Petitioner deposited her bonds with the committee. In 1935 she determined the bonds to be worthless, wrote them off, and in her income tax return for that year claimed a bad debt loss of $ 5,000, which loss was subsequently disallowed by respondent. In 1936, proceedings under section 77B of the Bankruptcy Act were instituted against A and, under a plan of reorganization approved by the court having jurisdiction of the proceedings,…
1Opinion of the Court
OPINION.
Arundemi, Judge:
The ultimate question here is one of petitioner’s basis for gain or loss upon the new company bonds and stock. Petitioner contends that the basis is $5,000, the original cost to her of the old company bonds. Respondent contends that it should be the fair market value of the new company bonds and stock at the time petitioner received them. The question is dependent upon what effect the reorganization of the old company in 1936, under section 77B of the Bankruptcy Act, together with subsequent events hereinafter referred to, had upon the carry-over of petitioner’s basis…
2Cases cited3 opinions
- Helvering v. Alabama Asphaltic Limestone Co.Supreme Court of the United States · 1942
- Helvering v. Southwest Consolidated Corp.Supreme Court of the United States · 1942
- Helvering v. Cement Investors, Inc.Supreme Court of the United States · 1942
3Cited by3 opinions
- Benedum v. GrangerDistrict Court, W.D. Pennsylvania · 1949
- Emil G. Seip v. CommissionerUnited States Tax Court · 1946
- Henry v. CommissionerUnited States Tax Court · 1946