Milbank v. Commissioner
United States Tax Court
T, an investment banker, was the prime mover in the promotion of a wallboard manufacturing plant which was to be located in Cuba. T sold stock and debentures in the Cuban project through his investment banking partnership to a number of his customers and also purchased some of the stock for himself and family. Due to difficulties encountered in the completion of the plant additional funds were necessary to prevent the failure of the venture.
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T, an investment banker, was the prime mover in the promotion of a wallboard manufacturing plant which was to be located in Cuba. T sold stock and debentures in the Cuban project through his investment banking partnership to a number of his customers and also purchased some of the stock for himself and family. Due to difficulties encountered in the completion of the plant additional funds were necessary to prevent the failure of the venture. T, fearing that the failure of the venture might have a serious effect upon his business, caused P corporation, a corporation owned equally by T and his…
1Opinion of the Court
OPINION
Naum, Judge:
This case involves not only the deductibility of the various payments made by petitioner in respect of First National City’s $300,000 loan to Cubana, but also the proper tax treatment of the loss sustained by petitioner on his own advances aggregating $40,000 to Cubana. We deal first with this latter issue.
1. The $lfi,000 Loom,. — There is no dispute that this loan became worthless in 1960 and that it is deductible in full in that year unless it is a “nonbusiness” debt. Sec. 166 (a) and (c), I.R..C. 1954. Moreover, it is also clear that if petitioner’s sole relationship to…
2Cases cited16 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Commissioner v. CulbertsonSupreme Court of the United States · 1949
- Whipple v. CommissionerSupreme Court of the United States · 1963
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Burnet v. ClarkSupreme Court of the United States · 1932
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3Cited by14 opinions
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- Jenkins v. CommissionerUnited States Tax Court · 1983
- Justice Steel, Inc. v. CommissionerUnited States Tax Court · 1980
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