Cammack v. Commissioner
United States Tax Court
Petitioners had each bought stock in Kreuger & Toll "for the production of income" and had received dividend income thereon before and during 1931. As the result of the adjudication in bankruptcy of that company in 1932 petitioners each deducted their cost of such stock in computing income taxes for that year. Respondent disallowed these deductions.
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Petitioners had each bought stock in Kreuger & Toll "for the production of income" and had received dividend income thereon before and during 1931. As the result of the adjudication in bankruptcy of that company in 1932 petitioners each deducted their cost of such stock in computing income taxes for that year. Respondent disallowed these deductions. Petitioners then paid the taxes as thus determined and later each sued for a refund of such taxes resulting from this disallowance. In 1940 this litigation was finally decided for petitioners, who then paid the legal fees incurred in connection…
1Opinion of the Court
OPINION.
Leech, Judge:
The issue is whether the disallowed expenses petitioners paid in 1940 allocable to the recovery of the overpayment of income taxes for 1932 are deductible in computing their income taxes for 1940 under section 23 (a) (2) of the Internal Revenue Code.1
Respondent denies deductibility only on the grounds, apparently,, that (1) the suit, in which the expenses were incurred and paid, was not brought to produce income, but to recover taxes, and (2) the property (stock) was known to be worthless, at least when the suit was brought; was thus not then held by petitioners for…
2Cases cited1 opinion
- Trust Under the Will of Bingham v. CommissionerSupreme Court of the United States · 1945
3Cited by34 opinions
- Williams v. McGowanCourt of Appeals for the Second Circuit · 1945
- Beck v. CommissionerUnited States Tax Court · 1950
- Wiesler v. CommissionerUnited States Tax Court · 1946
- Loew v. CommissionerUnited States Tax Court · 1946
- California and Hawaiian Sugar Refining Corporation, Limited v. The United StatesUnited States Court of Claims · 1962
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