Bohn v. Commissioner
United States Board of Tax Appeals
1. Section 24(a)(6) of the Revenue Act of 1934 does not prevent a grantor of a trust for the benefit of his daughter taking a deduction for a loss on a bona fide sale of stock by him to the trust. 2. Difference between unrecovered cost of land contracts and bonds taken in settlement of vendees' liability thereon is deductible as a bad debt. James R. Stewart,39 B.T.A. 87, followed.
1Opinion of the Court
*956OPINION.
Leech :
There is no ground for disallowing the loss upon the sale by petitioner of 1,000 shares of Hiram Walker preferred stock to the trust on the ground that the sale was not bona fide. It was made •at the market price; petitioner has never had any agreement or option to reacquire the stock, and has never done so. James Lee Johnson, 37 B. T. A. 155; affd., 104 Fed. (2d) 140; affd., 308 U. S. 523; Ralph Hochstetter, 34 B. T. A. 791; Oscar F. C. Kunau et al., Trustees, 27 B. T. A. 509.
Despondent, however, disallowed the deduction of any loss upon the sale upon the ground that such a…
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