Stewart v. Commissioner
United States Board of Tax Appeals
Where indebtedness under a land sale contract was settled for less than its face amount, which was its cost, the holder accepting bonds of the Federal Farm Mortgage Corporation and cash, conveying the legal title to the purchaser and canceling the remainder of the debt, which was worthless, held that his loss is deductible in full as a bad debt, and is not limited by the capital loss provisions affecting sales or exchanges of property. Sec. 117, Revenue Act of 1934.
1Opinion of the Court
*89OPINION.
Opper:
The issue is whether the transaction by which petitioner canceled the land sale indebtedness, relinquished his interest in the property, and received Federal Farm Loan bonds in a lesser amount than the face value of the debt, was a sale or exchange of capital assets on the one hand or is to be treated as the payment of a partially worthless debt on the other. Respondent does not contend that the indebtedness was partially worthless when acquired by petitioner or that it became worthless prior to the taxable year, so that the only question is whether petitioner is entitled to a…
2Cases cited5 opinions
- Woodward v. McCollumNorth Dakota Supreme Court · 1907
- Roby v. Bismarck National BankNorth Dakota Supreme Court · 1894
- D. S. B. Johnston Land Co. v. WhippleNorth Dakota Supreme Court · 1930
- Ferguson v. BloodCourt of Appeals for the Ninth Circuit · 1907
- Vail v. EvesmithNorth Dakota Supreme Court · 1932
3Cited by13 opinions
- J. E. Hawes Corp. v. CommissionerUnited States Tax Court · 1965
- Cushman v. United StatesDistrict Court, D. Arizona · 1956
- United States v. Zelma T. Kyle and Betty K. KyleCourt of Appeals for the Fourth Circuit · 1957
- Henry v. United StatesUnited States Court of Claims · 1960
- Kyle v. United StatesDistrict Court, E.D. Virginia · 1956
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