Union National Bank & Trust Co. of Elgin v. Commissioner

OPINION.

Haekon, Judge:

It is provided in section 23 (k) .(1) of the 1939 Code that deduction may be taken for debts which become worthless within a taxable year, “or (within the discretion of the Commissioner) a reasonable addition to a reserve for bad debts.” The petitioner, with permission of the Commissioner, changed from the specific charge-off method of treating its bad debts for income tax purposes to the reserve for bad debt method in 1942. In C. P. Ford & Co., Inc., 28 B. T. A. 156, 158, 159, this Court pointed out that if a taxpayer chooses to use the reserve for bad debt method of…