Humphrey v. Commissioner of Internal Revenue

SIBLEY, Circuit Judge.

In redetermining the taxes for 1941 of the petitioners as partners in the firm of Joe A. Humphrey Company, the Tax Court held that $47,431 realized by the partnership that year on notes which had been charged off as worthless in 1939 was ordinary income and not capital gain taxable at only one-half. The Tax Court also held that a wagering loss of $3,000 in 1941 of Joe A. Humphrey could not be allowed in reduction of his wagering gains because no testimony was offered that the losing wagers were transactions entered into for profit. The correctness of these two holdings…