Lebanon Nat. Bank v. Commissioner of Internal Revenue

BUFFINGTON, Circuit Judge.

In this case it appears the petitioner-taxpayer, a national bank, had bought, at a cost of $10,100, bonds of Russia of the par value of $10,000. Later that government ceased to pay interest on the bonds and subsequently officially repudiated the obligation thereof. During that time the curb market value declined, but as the bank still held the bonds, it claimed no loss thereon in its income returns. During that period the bank in its statements annually charged off 10 per cent, of the bond cost. In 1929 a national bank examiner appraised the bonds at $1,400, and…