Evening star., 1933-06-29
KAHN HITS CAPITAL
!. GAINS TAX CLAUSE
Says Sale of Stocks at End
of Year Is "Sort of An
nuaI Custom"
Continued From First Page.y

Continued From First Pagey
proceeded. saying the stock was sold
at the regular market prices.
In March, 1881, he added. his daugh-
ter arrived from abroad and they dis
cussed her affairs.
Z 1t was decided. in consultation with
her attorneys. he said. to turn over
all her securities to him and close a
trust. set up for her previously.
Stock Assignment Made.
The assignment of stock was made.
he continued. on March 30, 1881, but
dated December 81, 1886, because her
counsel suggested the cancellation of
the trust should take effect as of the
close of the year.
In April, 1882. Kahn continued. in
ternal revenue agents raised the point"
the stock had been reacquired within
80 days and therefore no loss could be
allowed.
Il was in Europe" he said. "and a
protest was filed by my attorneys
They contended the securities were not
actually reacquired until March, 1881,
three months later"
Fecora took up>the questioning after
Kahn finished reading his statement.
mann iil4SCACo q pIilSil NllliC liC ~
piled to questions and had difficulty re-
membering details.
Hard to Remember.
Did You cause the sale to be made
personality" Pecora asked.
ITS difficult after three years to
say" Kahn said.
Il recollect my daughter was in
formed of it and that the necessary
;.t,a L. -
Were the sales made all at one
time?"
I'm afraid I couldn't tell YOU"
'Were they made through broker?'
Again, 1 couldn't say that with any
deflniteneSS. They were either sold
through broker or through my Office"
Were they listed on the exchange at
the time?" ..t
yes. but I don't think Manhattan
Dearborn was"
Were the sales made through the
exchange"
Not necessarily couldn't positively
recollect after three years whether this
particular transaction went through the
exchange or curb market"
Went Through His Office.
Then. promoted by member of his
legal staff Kahn said:
L am now ulOlIHeu tleg olu Iiot so
through the exchange but through my
off1ct."
Pecora brought out that the transac-
ton was made by transfer of credits
and that no cash or checks .9ere eX-
changed
Kahn said ne couldn't recall whether
he discussed the sale with his daughter
prior to the transaction, but he was
certain he discussed it with her when
aud 81
proved it.
Was the price consistent with mar,
ket quotations." Pecora asked.
I'm quite certain it was 1
Kahn again consulted his attorney,
M. T Moore. and added
I'm informed by my mentor 1t was.
Doesn't Remember Market.
Questioned further by Pecora. Kahn
said he could not remember whether
there was falling market when he sold
the stock to his daughter.
Have YOU ever before or since sold
to your daughter or other members OF
your family at the end OF tax year
Pecora asked.
Yes. either I, or one of those acting
as agent for me-
Did you do it every year for a period
of years?'
All IlOI IN" ASNNS&Ao e~--
occurrence it was"
Did YOU on each occasion re-acquire
by any means the securities or like
securities?"
ITO the best of my knowledge never
within 80 days and rarely at all, but
can't recall
DO you have any one else making
decisions for you regarding the pur-
chase or sale of securities?
~ n
my children and wife and several peo-
pie have the power of attorney for me-
Sell Without Consulting.
rs 1t customary for persons other
than yourself to sell without consulting
you?'
YES frequently"
without previous consultation with
you?" /
Moore whispered into Kahn's ear and
Pecora asked that it be noted in the
record but the attorney said he was
not advising the witness. /
Kahn said his wife was authorized
to sell his stock without consulting him.
do YOU want the committee to be
lieye she is as well qualified as you?'
Pecora asked.
No" Kahn replied, "but I don't
think she makes such decisions with
out competent ADVICE.
Pecora asked if he had directed the
sales to his daughter. but kahn SAID
he could not remember.
He said he could not recall whether
his daughter was in the country at the
time.
Take Stock Losses.
DO YOU know whether she was con-
sulted?" Pecora asked again. -,
She had several people mere with
power of attorney for her.
"The same people as you had?'
eyes
In aN instances?"
Il should think SO"
Kahn agreed with Pecora that each |
December there are substantial sales
of securities" or bear raids, to take |
losses for income deduction purposes.
ITS an annual custom, isn't it?" Pc |
cora asked
Il believe it is" Kahn replied.
"Why did you pick out the year 1881 |
to make the sale?"
..To determine what owed the Gov |
ernment. to determine my losses and my |
income"
did you take a tax loss?'
THAT is an ugly connotation. sup |
pose this tax loss provision Will pc |
abolished when you are through with |
this hearing
Il hope So" Pecora said.
Ought to Be Abolished.
Kahn then volunteered that any law
which is APT to irritate public senti-
ment and cause resentment ouehI 10 pe
abolished"
He told Senator Steiwer, Republican.
of oregon. the capital gains and loss
provision should be abolished or
amended because it allowed the Gov
eminent to speculate on making