Court Opinion

ID: 4483593
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:16:11.577018+00
Date Added: 2024-06-11T15:04:27.329638
License: Public Domain

HaRROn, J., dissenting: In 1941 the laundry company was a going concern and petitioner’s investment remained in the business. The Union Trust Co. did not, in fact, give up its claim for $12,257.72 which represented, in fact, a debt of the laundry company. When petitioner, a stockholder, paid such amount of the corporation’s debt, he made a contribution thereof to the corporation. It is not shown, nor claimed, that petitioner loaned the above amount to the corporation. Therefore, it seems to follow, as a matter of both fact and law, that petitioner’s investment in the corporation was increased by $12,257.72, and he can not sustain a loss for tax purposes until he makes a final disposition of his stock in the laundry company. The position taken by the Union Trust Co. with respect to the reorganization under the Bankruptcy Act was rather unusual. However that may be, petitioner simply assumed part of a debt of the corporation which was not brought into the reorganization settlements of claims of creditors. Under the particular facts, I do not agree that the-reorganization under the Bankruptcy Act controls the question so as to give support to petitioner’s contention.