Court Opinion

ID: 4598983
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:22:24.821602+00
Date Added: 2024-06-11T07:52:02.917770
License: Public Domain

THEODORE AARON, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Aaron v. CommissionerDocket No. 13055.United States Board of Tax Appeals12 B.T.A. 556; 1928 BTA LEXIS 3504; June 13, 1928, Promulgated *3504  1.  Deduction for loss in trading on exchange allowed.  2.  Deduction for loss on sale of automobile disallowed.  Fred Van Dolsen, Esq., and Henry Lank, Esq., for the petitioner.  J. L. Backstrom, Esq., for the respondent.  SIEFKIN*556  This is a proceeding for the redetermination of a deficiency in income taxes for the year 1921 of $1,930.53.  The errors alleged are that the respondent erred (1) in disallowing a deduction of $7,552.16 on account of losses sustained in trading in produce on the Chicago Mercantile Exchange, and (2) in disallowing a deduction of $750 loss incurred on the sale of an automobile purchased and used for business purposes.  FINDINGS OF FACT.  During the period January 1, to June 11, 1921, the petitioner, a resident of Chicago, Ill., was connected with the corporation of Feilchenfeld & Aaron, Inc., engaged in the poultry, butter and egg business in Chicago, Ill.  While a stockholder in Feilchenfeld & Aaron, Inc., and during the period June 11, to July 8, 1921, the petitioner traded on his own account in butter and eggs on the Chicago Mercantile Exchange.  All of the sales and purchases on the Chicago Mercantile*3505  Exchange made by the petitioner were made through the corporation of Feilchenfeld & Aaron, Inc.  The Chicago Mercantile Exchange did not recognize corporations as traders and required two individuals as members of the exchange from any firm.  Trading on his own behalf but on the credit of Feilchenfeld & Aaron, Inc., the petitioner, between January 1, and July 8, 1921, bought and sold butter and eggs in various lots upon the exchange resulting in a net loss on all transactions of $7,552.16.  On July 8, 1921, he gave Feilchenfeld & Aaron, Inc., his check for $39,875.77, which amount included the $7,552.16 above.  The amount of $7,552.16 was taken by the petitioner as a deduction on his 1921 tax return and was disallowed by the respondent in the computation of the deficiency asserted in this proceeding.  *557  Some time in 1920 the petitioner purchased an automobile for use in business.  He used it in his business or that of Feilchenfeld & Aaron, Inc., until he sold it in February, 1921, for $1,200.  OPINION.  SIEFKIN: The evidence shows that a net loss of $7,552.16 in trading in butter and eggs on the Chicago Mercantile Exchange was sustained in 1921 and to that extent the*3506  respondent was in error.  The evidence with respect to cost of the automobile, its age, and the amount of depreciation sustained between the dates of purchase and sale, is so unsatisfactory that we approve the respondent's action in that regard.  Judgment will be entered under Rule 50.