Gaylord v. Commissioner
United States Board of Tax Appeals
Petitioner and a number of other corporations, banks, and individuals engaged in business in St. Louis, in December of 1931, signed an instrument of guaranty and deposited with one of the banks an aggregate of $2,000,000 to induce it to take over the assets and assume the liabilities of another bank, which was on the verge of being closed because of its inability to withstand a silent "run" and to meet withdrawals of $1,000,000 per day.
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Petitioner and a number of other corporations, banks, and individuals engaged in business in St. Louis, in December of 1931, signed an instrument of guaranty and deposited with one of the banks an aggregate of $2,000,000 to induce it to take over the assets and assume the liabilities of another bank, which was on the verge of being closed because of its inability to withstand a silent "run" and to meet withdrawals of $1,000,000 per day. The deposit was made to avert the probable loss of accounts receivable and other adverse effects upon petitioner's business, which it was felt would follow…
1Opinion of the Court
*1123OPINION.
Mellott :
The amended petition alleges that the claimed deduction of $12,451.58 should be allowed as a loss not compensated for by insurance or otherwise under section 23 (f) (all references being to the Revenue Act of 1936); under section 23 (a) as an ordinary and necessary expense paid or incurred during the taxable year in carrying on a trade or business; under 23 (q) as a contribution; or under 23 (k) as a debt ascertained to be worthless and charged off.
The respondent denies that the deduction is allowable under any of the sections relied upon. He contends that petitioner merely…
2Cases cited3 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
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- Kornhauser v. United StatesSupreme Court of the United States · 1928
3Cited by17 opinions
- Lohrke v. CommissionerUnited States Tax Court · 1967
- Young & Rubicam, Inc. v. The United StatesUnited States Court of Claims · 1969
- Pepper v. CommissionerUnited States Tax Court · 1961
- United States v. E. L. Bruce Co., IncCourt of Appeals for the Sixth Circuit · 1950
- Florida Publishing Co. v. CommissionerUnited States Tax Court · 1975
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