Court Opinion

ID: 9651517
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:21:40.380837+00
Date Added: 2024-06-11T18:12:34.654364
License: Public Domain

EVANS, Circuit Judge
(dissenting).
A loss “which is not compensated for by insurance or otherwise” (section 234 (a) (4), Revenue Act 1921, 42 Stat. 255) is ordinarily not allowed until its realization. In Lucas v. American Code Co., 280 U. S. 445, 50 S. Ct. 202, 203, 74 L. Ed. 538, 67 A. L. R. 1010, the court said: “Generally speaking, the income tax law is concerned only with realised losses, as with realised gains.” Realization is usually evidenced by closed or completed transactions. United States v. S. S. White Dental Manufacturing Co., 274 U. S. 398, 47 S. Ct. 598, 71 L. Ed. 1120. Article 141, Treasury Regulations 62, dealing with losses says: “They (losses) must usually be evideneed by closed and completed transactions.”
Applying those rules to the facts of this ease, it seems to the writer that part of the loss occurred in the year in which the Wisconsin trial court awarded judgment in taxpayer’s favor for damages for only a part of what it claimed. The balance occurred the next year when the Wisconsin court reversed this judgment. It was in these year’s that the losses were realised. Then, and not until then, were they “evidenced by closed and completed transactions.” It seems to me the Board of Tax Appeals correctly held that the losses occurred, not when the fire took place, but when the jury’s verdict and the Supreme Court’s decision closed the issues of amount and liability.