Gussow, Kahn & Co. v. Commissioner
United States Tax Court
Petitioner during 1943 and 1944 advanced to its wholly owned subsidiary a total of $ 11,334.43. These advances constituted the only capital of the subsidiary during the year involved and they represented an investment by petitioner in the unissued capital stock of the subsidiary.
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Petitioner during 1943 and 1944 advanced to its wholly owned subsidiary a total of $ 11,334.43. These advances constituted the only capital of the subsidiary during the year involved and they represented an investment by petitioner in the unissued capital stock of the subsidiary. This investment became worthless during the taxable year when it was determined to liquidate the subsidiary, and it is therefore held that, with the exception of the advances made after the determination to liquidate the subsidiary, petitioner may deduct the advances involved under section 23 (g) (4) of the Internal…
1Opinion of the Court
OPINION.
Hill, Judge:
Respondent agrees that petitioner advanced the sum of $11,334.43 to Tomorrow’s Masterpieces at various times during 1943 and 1944 and that petitioner has incurred a loss of that amount. He contends, however, that such loss is not deductible in the taxable year 1944 because, first, it is not a bad debt pursuant to section 23 (k) of the Internal Revenue Code; second, it did not represent an investment in worthless stock within the purview of section 23 (g) (4) of the Internal Bevenue Code; and, third, “the investment of petitioner in Tomorrow’s Masterpieces has not been…
2Cases cited2 opinions
- Doyle v. Mitchell Brothers Co.Supreme Court of the United States · 1918
- Janeway v. CommissionerUnited States Tax Court · 1943
3Cited by4 opinions
- Byerlyte Corporation v. WilliamsDistrict Court, N.D. Ohio · 1959
- Datamation Services, Inc. v. CommissionerUnited States Tax Court · 1976
- Gussow, Kahn & Co. v. CommissionerUnited States Tax Court · 1949
- Road Materials, Inc. v. CommissionerUnited States Tax Court · 1971