Court Opinion

ID: 4616531
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:34:40.275379+00
Date Added: 2024-06-11T07:59:44.143496
License: Public Domain

EDWARD J. SLATER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Slater v. CommissionerDocket No. 13372.United States Board of Tax Appeals12 B.T.A. 60; 1928 BTA LEXIS 3609; May 23, 1928, Promulgated 1928 BTA LEXIS 3609">*3609  Losses resulting from shrinkage of value of the stock of a corporation which was a going concern in the taxable years disallowed as deductions from taxable income for such years.  Edward J. Slater pro se.  Benton Baker, Esq., for the respondent.  LANSDON 12 B.T.A. 60">*60  The respondent has asserted deficiencies in income tax for the years 1922 and 1923, in the respective amounts of $179.15 and $192.40.  The only issue is whether certain shares of stock became worthless in the taxable years and, to the extent of their cost, were proper 12 B.T.A. 60">*61  deductions from gross income of the petitioner as losses sustained in such years and not compensated for by insurance or otherwise.  FINDINGS OF FACT.  The petitioner is the owner of 341 shares of the par value of $100 each, of the Nye Schneider Fowler Co., a corporation hereinafter referred to as the corporation, which he acquired prior to the taxable years at a cost of $35,881.82.  During the taxable years and probably both prior and subsequent thereto the corporation sustained losses and was unable to continue in business without the consent of its creditors.  On August 20, 1921, its stockholders gave an option1928 BTA LEXIS 3609">*3610  to certain parties for the purchase of all its stock at $42 per share.  This option was never exercised and the corporation has ever since continued to conduct the business for which it was organized.  It has not been financially successful in its operations.  The value of the stock of the corporation in the taxable years can not be determined from the record.  OPINION LANSDON: The owner of corporate stock may deduct from his income for any taxable year losses that are sustained in the sale of such stock, or if there is no sale, by proof that the stock was worthless in such years.  In ; ; . In the instant proceeding the petitioner did not sell any part of his stock or otherwise dispose of the same in either of the taxable years. The corporation continued in business during such years and at all times had a considerable body of assets to offset its obligations to its stockholders and creditors.  The loss, if any, that the petitioner sustained was not determined or ascertainable in either of the taxable years.  There is no1928 BTA LEXIS 3609">*3611  provision in the taxing statute which authorizes taxpayers to deduct from income a mere shrinkage in value of property not disposed of by sale or otherwise.  See ; ; ; ; ; . Judgment will be entered for the respondent.