Case ID: bta_5/html/0669-01.html
Source: Caselaw Access Project
Author: {"author": "Marquette:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Appeal of Stimpson Computing Scale Co.
    Docket No. 2722.
    Promulgated November 29, 1926.
    Where a taxpayer had a net loss resulting from operations for nine months from incorporation to the end of 1919, it is not entitled to deduct the net loss from net income of 1920, under section 204(b) of the Revenue Act of 1918.
    
      Harry Friedman, Esq., and Edward McCarthy, Jr., Esq., for the petitioner.
    
      l/Villis D. Nance, Esq., for the Commissioner.
    This appeal is from the determination of a deficiency in income and profits taxes for the year 1920 amounting to $4,419.08. The single issue raised is whether a taxpayer is entitled to deduct from 1920 net income a net loss due to nine months’ operation in 1919.
    FINDINGS OF FACT.
    The petitioner is a Kentucky corporation with its principal office located in Louisville.
    
      It was incorporated on March 31, 1919, and for business done thereafter during 1919 it took its inventory and closed its books on December 31, 1919. During the period of operation from March 31, 1919, through December 31, 1919, the petitioner suffered a net loss of $33,949.81, which it sought to deduct from its net income of 1920.
    The net loss deduction so claimed by the petitioner was disallowed by the Commissioner, who determined a deficiency in taxes for the year 1920 in the amount of $4,419.08.
    From that determination the petitioner duly appealed to this Board.
   OPINION.

Marquette:

In Appeal of Butlers Warehouses, Inc., 1 B. T. A. 851, and Appeal of Crowell & Little Construction Co., 3 B. T. A. 829, the Board held that net losses sustained under the circumstances set forth in the findings of fact were not properly deductible from the income of the following year. We find no sufficient reason to change the decisions therein made, and on the authority of those appeals the action of the Commissioner in disallowing such deductions must be sustained.

The deficiency for the year 1920 is $1^19,08. Order will he entered accordingly.