Harris v. Commissioner
United States Board of Tax Appeals
Suit to foreclose a mortgage upon property owned by a corporation was instituted in a state court. The corporation distributed its cash to its stockholders as a liquidating dividend. Subsequently a deficiency judgment was rendered against the corporation, but no effort was ever made to compel repayment of the liquidating dividends. Petitioner computed his loss upon the corporate stock by deducting the amount of the liquidating dividends from its cost.
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Suit to foreclose a mortgage upon property owned by a corporation was instituted in a state court. The corporation distributed its cash to its stockholders as a liquidating dividend. Subsequently a deficiency judgment was rendered against the corporation, but no effort was ever made to compel repayment of the liquidating dividends. Petitioner computed his loss upon the corporate stock by deducting the amount of the liquidating dividends from its cost. Held that the loss was properly computed, though it may be deducted from gross income only to the extent provided by the section of the revenue…
1Opinion of the Court
*714OPINION.
Mellott:
Petitioner contends that his stock in the Arcade Co. became worthless during the calendar year 1935, as a result of which he sustained a loss, deductible in full as an ordinary loss, in an amount equal to the cost of the stock. In his income tax return he deducted, as an ordinary loss, the difference between the cost of the stock ($32,220) and the aggregate of the liquidating dividends ($1,985.94) or $30,234.06. The respondent determined that the loss was a capital loss, deductible only to the extent authorized by sub-paragraphs (a) and (d) of section 117 of the Revenue Act of…
2Cases cited8 opinions
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Burnet v. Sanford & Brooks Co.Supreme Court of the United States · 1931
- United States v. S. S. White Dental Manufacturing Co.Supreme Court of the United States · 1927
- Helvering v. HammelSupreme Court of the United States · 1941
- Sanger v. UptonSupreme Court of the United States · 1875
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3Cited by1 opinion
- Harris v. CommissionerUnited States Board of Tax Appeals · 1941