Frank L. Laport v. Commissioner of Internal Revenue

CUMMINGS, Chief Judge.

On his 1973 income tax return, Frank L. Laport claimed an ordinary loss deduction of $150,841, representing his out-of-pocket costs in a failed real estate transaction. The Commissioner of Internal Revenue agreed with the computation of the loss but not with its characterization. He found instead that it was a capital loss, deductible only to the extent of $1,000 against ordinary income. Accordingly he determined that Laport had underpaid his 1973 taxes by $73,093. The United States Tax Court upheld the Commissioner’s determination, Laport v. Commissioner, 40 T.C.M. 1134…