Horner v. Commissioner
United States Tax Court
The petitioner in his individual capacity obtained from the manufacturer of certain merchandise a franchise to sell that merchandise in a stated locality and a line of credit. This merchandise was invoiced to petitioner as an individual but was sold through a corporation of which the petitioner was president, general manager, and major stockholder.
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The petitioner in his individual capacity obtained from the manufacturer of certain merchandise a franchise to sell that merchandise in a stated locality and a line of credit. This merchandise was invoiced to petitioner as an individual but was sold through a corporation of which the petitioner was president, general manager, and major stockholder. He tried to have the invoicing and franchise changed to the corporation but the manufacturer refused to make the change and invoiced all of the merchandise to the petitioner. The invoices were paid by the corporation until it became insolvent. The…
1Opinion of the Court
OPINION.
MulROney, Judge:
The respondent determined deficiencies in petitioners’ income tax for the years 1955 and 1956 in the respective amounts of $535.39 and $1,972.31.
The only issue presented is whether the 1956 payment by Harry Horner of a judgment, court costs, and appellate expense in the sum of $6,255.10 is deductible in that year as a loss under section 165, I.R.C. 1954,1 or as a bad debt under section 166, or as a nonbusiness bad debt, where the deduction is limited under section 166(d) to a short-term capital loss.
All of the facts were stipulated and they are found accordingly.
Petitio…
2Cases cited2 opinions
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Sternberg v. CommissionerUnited States Board of Tax Appeals · 1935
3Cited by19 opinions
- J.R. Betson, Jr. And Joan Sue Betson v. Commissioner of Internal Revenue ServiceCourt of Appeals for the Ninth Circuit · 1986
- Siple v. CommissionerUnited States Tax Court · 1970
- Donald R. Campbell and Patricia A. Campbell v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1989
- Rietzke v. CommissionerUnited States Tax Court · 1963
- Hoffman v. United StatesDistrict Court, D. Oregon · 1967
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