Hurt v. Commissioner
United States Board of Tax Appeals
1. Attorney fees incurred and paid by the decedent in the defense of a lawsuit brought against him as a director of a corporation may be deducted as ordinary and necessary business expenses under section 214(a)(1) of the Revenue Acts of 1921 and 1924. 2. A loss sustained by the decedent in 1921 by reason of the worthlessness of capital stock of a corporation of which he was the majority stockholder and director does not constitute a "net loss" under the statute.
1Opinion of the Court
OPINION.
Morris :
The respondent has determined deficiencies in income taxes of $7,429.49, $14,936.16, and $5,323 for the years 1922,1923, and 1924 against the above entitled estate and it is for the redetermination thereof that this proceeding is brought.
It is alleged that the respondent erred (a) in disallowing certain deductions claimed by the decedent during the taxable years aforesaid in the defense of a suit brought against him for the recovery of $250,000 and interest, and (b) in disallowing as deductions for 1922 and 1923 amounts claimed on account of an alleged net loss suffered in…
2Cases cited8 opinions
- Kornhauser v. United StatesSupreme Court of the United States · 1928
- Burnet v. ClarkSupreme Court of the United States · 1932
- Dalton v. BowersSupreme Court of the United States · 1932
- Backer v. CommissionerUnited States Board of Tax Appeals · 1924
- Peoples-Pittsburgh Trust Co. v. CommissionerUnited States Board of Tax Appeals · 1930
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3Cited by5 opinions
- First National Bank of Atlanta v. United StatesDistrict Court, N.D. Georgia · 1962
- General Outdoor Advertising Co. v. CommissionerUnited States Board of Tax Appeals · 1935
- Holmes v. CommissionerUnited States Board of Tax Appeals · 1938
- Hurt v. CommissionerUnited States Board of Tax Appeals · 1934
- Low v. CommissionerUnited States Tax Court · 1944