Hoffman v. United States

OPINION AND ORDER

SOLOMON, Chief Judge:

Plaintiffs, Lee and Judy Hoffman, seek to recover $9,345.61 in federal income taxes paid in their 1958 through *8851961 joint returns. The case was submitted on stipulated facts.

The issue is whether the Hoffmans’ payments to a bonding company are deductible as losses in a transaction entered into for profit under § 165(c) (2), Int. Rev.Code of 1954,1 or whether these payments are either nonbusiness bad debts deductible under § 166(d),2 or losses from the sale or exchange of capital assets under § 165(f).3

In 1958, Lee Hoffman organized Lee Hoffman, Inc.,…