Jewell Ridge Coal Corporation v. Commissioner of Internal Revenue

ALBERT V. BRYAN, Circuit Judge.

The Commissioner of Internal Revenue determined that the purchase by Jewell Ridge Coal Corporation of the outstanding indebtedness of the Oneida & Western Railroad Company, a majority of whose stock it simultaneously acquired, and Jewell’s subsequent advances to the Railroad, constituted contributions to capital and not loans. With their deduction as bad debts disallowed on abandonment of the Railroad, an income tax deficiency for 1953 resulted. This assessment the Tax Court sustained. It also sustained the Commissioner’s ruling that the loss of Jewell on the…