Janeway v. Commissioner
United States Tax Court
The petitioners and others advanced money to a corporation. Each received the corporation's notes, and six-tenths of a share of stock for each $ 1,000 advanced. No other stock was issued except that later, after advancements of money had ceased, after default upon interest on all notes and upon principal of a part, some stock was issued as additional compensation or bonus for services. The corporation had no other assets or capital, except the advances so made.
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The petitioners and others advanced money to a corporation. Each received the corporation's notes, and six-tenths of a share of stock for each $ 1,000 advanced. No other stock was issued except that later, after advancements of money had ceased, after default upon interest on all notes and upon principal of a part, some stock was issued as additional compensation or bonus for services. The corporation had no other assets or capital, except the advances so made. Held that the petitioners owned securities, and upon dissolution of the corporation loss therein was properly considered and limited…
1Opinion of the Court
OPINION.
Disney, Judge:
The petitioners contend that they were mere creditors of Thomas Associates, Inc., that the notes held by them became worthless in the taxable year and were charged off. and that they properly deducted the entire amount thereof as worthless debts in the taxable year. One of the amendments to section 23 (k) of the Internal Revenue Code, made by section 124 (a) of tbe Revenue Act of 1942,1 has the effect of making the deduction for worthless debts depend solely upon the fact of worthlessness, and eliminates the necessity of an ascertainment of worthlessness and an actual…
2Cited by74 opinions
- Schnitzer v. CommissionerUnited States Tax Court · 1949
- Dobkin v. CommissionerUnited States Tax Court · 1950
- Smith v. CommissionerUnited States Tax Court · 1951
- Maloney v. SpencerCourt of Appeals for the Ninth Circuit · 1949
- Nelson v. CommissionerUnited States Tax Court · 1952
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