Paine v. Commissioner
United States Tax Court
Petitioner held stock in 1966 in a corporation. The corporate officers engaged in fraudulent and illegal acts that artificially inflated the value at which the stock was traded and as a result of these acts the stock declined in value, but did not become worthless in 1966. Petitioner owned the stock at the end of the taxable year 1966. Petitioner claimed a theft loss deduction for the value of the stock.
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Petitioner held stock in 1966 in a corporation. The corporate officers engaged in fraudulent and illegal acts that artificially inflated the value at which the stock was traded and as a result of these acts the stock declined in value, but did not become worthless in 1966. Petitioner owned the stock at the end of the taxable year 1966. Petitioner claimed a theft loss deduction for the value of the stock. Held: A theft loss deduction can be sustained only if a theft occurred under the applicable State law. Petitioner has failed to prove that, under Texas law, the misconduct of the corporate…
1Opinion of the Court
Lester I. Paine, Petitioner v. Commissioner of Internal Revenue, Respondent
Paine v. Commissioner
Docket No. 2461-71
United States Tax Court
63 T.C. 736; 1975 U.S. Tax Ct. LEXIS 168;
March 31, 1975, Filed
Decision will be entered for the respondent.
Petitioner held stock in 1966 in a corporation. The corporate officers engaged in fraudulent and illegal acts that artificially inflated the value at which the stock was traded and as a result of these acts the stock declined in value, but did not become worthless in 1966. Petitioner owned the stock at the end of the taxable year 1966. Petitioner claimed…
2Cases cited14 opinions
- Edwards v. BrombergCourt of Appeals for the Fifth Circuit · 1956
- Henry Schwartz Corp. v. CommissionerUnited States Tax Court · 1973
- Monteleone v. CommissionerUnited States Tax Court · 1960
- Paine v. CommissionerUnited States Tax Court · 1975
- Nichols v. CommissionerUnited States Tax Court · 1965
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