Larus v. Commissioner

This appeal involves a deficiency in income tax for the year 1936 resulting from the disallowance of a loss deduction claimed in the petitioner’s return. The petitioner and another were owners, as tenants in common, of real estate which they had purchased for an investment more than ten years before. The property was subject to a mortgage upon which they were personally liable. On January 31, 1936, when the mortgage was in default, they deeded to the mortgagee all their interest in the premises in consideration of, obtaining a release from liability on the bond and mortgage. This disposition…