James A. Messer Co. v. Commissioner
United States Tax Court
1. In 1965 petitioner completed the liquidation of a valid, unsecured debt owed to it by an insolvent sibling corporation, and claimed a bad debt deduction with respect thereto.
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1. In 1965 petitioner completed the liquidation of a valid, unsecured debt owed to it by an insolvent sibling corporation, and claimed a bad debt deduction with respect thereto. Respondent disallowed the deduction, asserting that the debt had actually become wholly worthless, and hence deductible, prior to 1965. Held, the identifiable events marking the worthlessness of the debt occurred in 1965. Held, further, respondent's argument based on the allegation that petitioner artificially ordered the affairs of itself and its debtor solely with the aim of achieving the optimum tax results must…
1Opinion of the Court
Foerester, Judge:
Respondent has determined deficiencies in petitioner’s Federal income tax of $4,295.70 and $42,428.40 for the taxable years 1964 and 1965, respectively. The issues presented for our decision concern petitioner’s entitlement to deductions under section 166 1 for additions to its bad debt reserve.
FINDINGS OF FACT
General
Some of the facts were stipulated and are so found. The two stipulations of facts and the exhibits attached thereto are incorporated herein by this reference.
For the years 1964 and 1965 petitioner filed its Federal income tax returns on a calendar year basis with…
2Cases cited26 opinions
- Boehm v. CommissionerSupreme Court of the United States · 1945
- Avery v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1927
- Black Motor Co. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1942
- Black Motor Co. v. CommissionerUnited States Board of Tax Appeals · 1940
- Denver & Rio Grande Western Railroad Company v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1960
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