Court Opinion

ID: 4490227
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:02:15.57651+00
Date Added: 2024-06-11T15:03:56.435429
License: Public Domain

Smith,
dissenting: In its income-tax return for 1922, petitioner deducted from gross income on account of debts ascertained to be worthless and charged off within the year $43,295.52. The Commissioner disallowed the deduction of $30,000 of this amount and allowed the deduction for bad debts charged off of only $13,295.52. The findings of fact made by the Board show bad debts charged off in 1922 in the amount of $23,151.57. No contention was raised by the Commissioner at the hearing or at any time that the debts in the amount of $23,151.57 were not ascertained to be worthless within the taxable year. Apparently the petitioner made a mistake in its income-tax return in not claiming the deduction from gross income of the full amount of $53,151.57, namely $23,151.57 for bad debts charged off in 1922 plus $30,000 added to the reserve. Under the decision of the Board in Kay Manufacturing, 18 B. T. A. 753, the petitioner was not entitled to the deduction of the amount added to the reserve. There appears to be no reason, however, why the petitioner in this proceeding is not entitled to deduct $23,151.57 representing the amount of the debts actually charged off. I dissent from the decision of the Board in allowing the deduction of only $13,295.52 for debts charged off within the year instead of $23,151.57.