Court Opinion

ID: 4601857
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:28:29.569816+00
Date Added: 2024-06-11T07:59:22.310306
License: Public Domain

APPEAL OF E. J. BARKLOW.Barklow v. CommissionerDocket No. 4021.United States Board of Tax Appeals3 B.T.A. 685; 1926 BTA LEXIS 2597; February 11, 1926, Decided Submitted August 20, 1925.  *2597 E. J. Barklow pro se.  B. H. Saunders, Esq., for the Commissioner.  *685  Before LOVE.  This is an appeal from the determination of a deficiency in income tax for the year 1923 in the amount of $169.19.  FINDINGS OF FACT.  In March, 1919, the taxpayer purchased bonds of the University Heights Farms Co., of Darby, Mont., in the amount of $5,000.  A year later he purchased additional bonds from this company in the amount of $1,000.  The venture was unsuccessful and the bondholders took over the property.  They were also unsuccessful and, during 1923, the bonds were surrendered to the trustee, the Merchants Trust & Savings Bank, of St. Paul, Minn., the property being taken over by the creditors of the bondholders.  *686  The creditors then organized, under the laws of Delaware, the MacIntosh-Morello Orchards, Incorporated, main office at Darby, Mont.In the reorganization the bondholders of the University Heights Farms Co. received second preferred stock of the new company in the ratio of one share of stock of the par value of $100 to each $200 face value of the bonds.  This gave the taxpayer, for his $6,000 in bonds of the University Heights*2598  Farms Co., $3,000 par value of the second preferred stock of the MacIntosh-Morello Orchards, Incorporated.  The taxpayer claimed, and the Commissioner denied, a loss of $3,000, being the difference between the par value of the bonds and the par value of the stock received by the taxpayer in exchange for the bonds.  There was no evidence of the market value of the stock.  DECISION.  The determination of the Commissioner is approved.