Black v. Commissioner
United States Tax Court
The petitioners sold residential property, a part of the selling price of which was represented by a note secured by a second mortgage upon the property. Later the petitioners relinquished such note for cash and another note which together totaled less than the face amount of the original note.
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The petitioners sold residential property, a part of the selling price of which was represented by a note secured by a second mortgage upon the property. Later the petitioners relinquished such note for cash and another note which together totaled less than the face amount of the original note. Held, that since the fair market value of the property securing the original note was in excess of the indebtedness secured by both the first and second mortgages, the indebtedness due the petitioners was not worthless in whole or in part, and the petitioners are not entitled to a bad debt deduction…
1Opinion of the Court
OPINION
The petitioners contend that the $15,031.81 debt became worthless to the extent of $3,693.61 in 1963 and to that extent is deductible under section 166 of the Internal Revenue Code of 1954.3 Such $3,693.61 represents the difference between the face amount of the $15,031.81 note surrendered by petitioners on July 24, 1963, and the amount accepted in substitution therefor, namely, $5,031.81 in cash and another note for $6,306.39.
The respondent, on the other hand, contends that the petitioners have failed to establish that the $15,031.81 debt was worthless in whole or in part in 1963, and…
2Cases cited4 opinions
- H. Beale Rollins and Mary E. Rollins v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1960
- Rollins v. CommissionerUnited States Tax Court · 1959
- O'Bryan Bros. v. COMMISSIONER OF INTERNAL REVENUECourt of Appeals for the Sixth Circuit · 1942
- Raffold Process Corp. v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1946
3Cited by6 opinions
- FLINT INDUS. v. COMMISSIONERUnited States Tax Court · 2001
- Black v. CommissionerUnited States Tax Court · 1969
- KLAUE v. COMMISSIONERUnited States Tax Court · 1999
- Malik H. Franklin v. CommissionerUnited States Tax Court · 2020
- Shea v. CommissionerUnited States Tax Court · 2000
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