Court Opinion

ID: 6890275
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:39:31.401386+00
Date Added: 2024-06-11T16:05:49.222616
License: Public Domain

CHASE, Circuit Judge
(concurring).
The decisive issue is whether the petitioner’s basis for determining gain or loss on the sale of the bonds should be the cost of them or that cost less the amount of the deduction allowed the petitioner in a previous year to the extent that it then wrote down the bonds. The petitioner insists that the deduction thus allowed should not affect its basis because it so happened that the deduction has never affected its tax, as it received no benefit from the allowance of the deduction, since no income was thereby freed from taxation in the year of the allowance. It also insists that the write-down is of little, or no, evidential significance as to the then value of the bonds because it was involuntary and required by the bank examiner.
As the taxability of recoveries in later years of the amount in whole or in part of tax deductions previously claimed and allowed is not involved, that part of Dob-son v. Commissioner of Internal Revenue, 320 U.S. 489, 64 S.Ct. 239, which deals with the effect of the failure to secure any tax benefit from the allowance of the deduction on the question of the actual receipt of income when making such recoveries is not here applicable.
The fact that the bank examiner did reqtiire the write-down, coupled with the fact that the bank made it, is some evidence that the bonds had then become worthless to the extent of the write-down, and the weight and effect of the evidence as to the circumstances under which the write-down was made were for the Tax Court to determine. When that evidence is considered in connection with the fact that the bank, under no compulsion from the bank examiner to claim any deduction in its income return for that year, did claim such deduction and the Commissioner allowed it, there was substantial evidence that the bonds had become worthless to that extent in the year the deduction was claimed and allowed. Accordingly there was the required evidential support of the finding of the Tax Court to the effect that the petitioner did not suffer any actual loss in the later taxable years in which it sold the bonds. That being so, Dobson v. Commissioner of Internal Revenue, supra, supports not the petitioner but the respondent and requires an affirmance.
FRANK, Circuit Judge, concurs in the opinion of CHASE, Circuit Judge.