Alson N. Johnson and Margaret C. Johnson v. Commissioner of Internal Revenue

Following the death of Mr. Johnson’s partner in a business enterprise, and the collection by Mr. Johnson of the proceeds of the life insurance policy he had taken out upon the life of his partner, the partnership business was wound up and concluded. Earlier the taxpayers had claimed and been allowed operating losses suffered by the partnership. After the termination of the partnership business, the taxpayers claimed a long term capital loss in consequence of the failure of the partnership’s business endeavor. The claimed long term capital loss was disallowed as having been compensated by the…