Steele Cotton Mill Co. v. Commissioner
United States Board of Tax Appeals
A debt may not be charged off as worthless until the taxpayer has taken all reasonable steps to determine that there is no probability of payment or collection thereof and has prima facie evidence to prove that the debt has no value. Under section 234(a)(5) of the Revenue Act of 1918 a part of a debt may not be written off as worthless and the other part maintained on the books of the taxpayer as having a value.
1Opinion of the Court
*301OPINION.
Graupner :
The' taxpayer contends that, having considered the debt of $26,875.28 worthless and written it off its books of account on December 31, 1920, the Commissioner erred in not allowing that amount to the taxpayer as a deduction in its tax return for the calendar year 1920. As an alternative the taxpayer asserts that the Commissioner, having disallowed the deduction of the entire amount of the debt, should have allowed a deduction of-$8,162.60, which is the difference between the sum of $18,712.68, for which it agreed to compromise on December 16,1920, and the amount of…
2Cited by11 opinions
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- Lafayette Lumber Co. v. CommissionerUnited States Board of Tax Appeals · 1930
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