Court Opinion

ID: 4617545
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:36:47.368796+00
Date Added: 2024-06-11T07:55:19.211582
License: Public Domain

APPEAL OF EDWARD F. DALTON.Dalton v. CommissionerDocket No. 1657.United States Board of Tax Appeals2 B.T.A. 615; 1925 BTA LEXIS 2313; September 28, 1925, Decided Submitted June 26, 1925.  *2313 E. L. Hayes and T. R. Meyer, Esqs., for the taxpayer.  W. Frank Gibbs, Esq., for the Commissioner.  *615  Before GRAUPNER, TRAMMELL, and PHILLIPS.  This is an appeal from the determination of a deficiency of $913.15 in income tax for the calendar year 1919.  The deficiency arises from the disallowance by the Commissioner of a deduction of $6,000 claimed as a bad debt.  FINDINGS OF FACT.  1.  The taxpayer is an individual residing in the State of California.  2.  In 1915 the taxpayer accepted from one Dettling, a tenant residing on the taxpayer's ranch, a chattel mortgage in the amount of $16,000, to secure certain loans which he had made to Dettling for the purpose of purchasing live stock and equipment and also to cover certain arrears in rent.  In 1916 the taxpayer foreclosed on the mortgaged property and at a receiver's sale bid the property in for $10,000, and in 1916 he obtained a judgment against Dettling for the balance of $6,000, but never made any effort to collect on the judgment.  3.  Dettling surrendered his lease at some time not disclosed by the record, but presumably in 1916, and was later located at Sacramento and at San Francisco. *2314  At the time he surrendered the lease and left the taxpayer's ranch he had some furniture, a team of horses, wagons, and some $400 or $500 in cash.  In 1918 taxpayer made an effort to collect the judgment by a personal interview, *616  Dettling and his wife separated in 1919 and since that time taxpayer has been unable to learn where he is.  In 1919 taxpayer charged off the sum of $6,000 as a bad debt.  He does not know the present whereabouts of Dettling, but from time to time, and as late as May or June, 1925, inquired about him from relatives in an effort to locate him.  Prior to the separation of Dettling and his wife and his disappearance, taxpayer had always found Dettling to be honest.  DECISION.  The deficiency determined by the Commissioner is disallowed.  ARUNDELL not participiating.