Central Hanover Bank & Trust Co. v. United States

35 F. Supp. 764, 92 Ct. Cl. 201, 26 A.F.T.R. (P-H) 114, 1940 U.S. Ct. Cl. LEXIS 1

• Court: United States Court of Claims
• Decided: December 2, 1940
• Docket: No. 44896
• Status: Published

Opinion

The court decided that the plaintiff was entitled to recover,, in an opinion per curiam, as follows:

Per Curiam :

This case involves the question of whether* under section 23 (r) of the Revenue Act of 1932, a loss sustained by the taxpayer (who was engaged in the business' of trading in securities) on his individual transactions in stocks and bonds held for two years or less may be offset; against his share of partnership profits realized from similar’ transactions during the same taxable period. Some other-questions were also presented which are not necessary to-be considered if the answer to the question above stated is in. the affirmative.

In the case of Neuberger v. Commissioner, decided November 12, 1940, the Supreme Court held that such an offset can be made against partnership security profits under-the section above referred to.

In Klingenstein v. United States, 85 C. Cls. 164 (certiorari denied, 302 U. S. 116), this court followed the decision of the. Circuit Court of Appeals of the Second Circuit, in Johnston v. Commissioner, 86 Fed. (2d) 732, where it was held by a divided court that a partner could not offset his non-capital net loss against his share of partnership net gain. The decision of the Supreme Court in the Neuberger case, supra, overrules the decisions made in the two cases last cited and in effect holds that the plaintiff is entitled to recover herein.

There is no dispute as to the facts in the case and under-the law as laid down by the Supreme Court the plaintiff is. entitled to recover $2,120.19, with interest as provided by law. Judgment will be rendered accordingly.