Mitchell v. Commissioner of Internal Revenue

AUGUSTUS N. HAND, Circuit Judge.

The petitioner-appellant in his income tax return sought to take a loss upon certain securities purchased in 1911. These securities consisted of option warrants whereby the holder had the right within ten years from August 1, 1911, to purchase common stock of the American Power & Light Company. .He never exercised this option, which expired on August 1, 1921, and thereby became valueless. In the taxpayer’s return for 1921 he deducted a loss on the warrants based on a valuation as of March 1, 1913, but the Commissioner assessed the loss on the basis of the cost…