Larson v. Cuesta

HOLMES, Circuit Judge.

This appeal involves income taxes for the year 1935. The controversy arises out of a loss sustained by the taxpayer with respect to certain bonds of the Peninsula Motors Corporation purchased by him in 1925. The bonds were part of a total issue of $120,000, and were secured by a trust deed in the nature of a mortgage on real estate in Florida. The question presented is: Did the court below err in allowing the taxpayer to deduct as a bad debt the excess of the amount he paid for said bonds over the amount he received during the year upon the sale of the real property…