Heyn v. Commissioner

4 B.T.A. 1256, 1926 BTA LEXIS 2025

• Court: United States Board of Tax Appeals
• Decided: September 30, 1926
• Docket: Docket No. 3788.
• Status: Published

Opinion

Phillips:

Petitioner appeals from the determination of a deficiency of $105, income tax for 1923, and alleges error by the Commissioner in refusing to allow a deduction of $3,000 for a debt alleged to have been charged off within the taxable year, the basis of the disallowance being that such debt was not ascertained to have been worthless in 1923.

FINDINGS OF FACT.

In June, 1923, the petitioner indorsed the note of one Herman C. Vietor for $3,000, which was then discounted at a bank at which both Vietor and the petitioner had accounts. Both the taxpayer and Vietor were employees of the same corporation. In September, 1923, the note being due and unpaid, the bank applied to its payment the amount which Vietor had on deposit with it, and the balance, $2,800, was paid to it by the petitioner.

The petitioner during 1923 ascertained said debt to be worthless.

In preparing his 1923 income-tax return petitioner claimed a deduction of $3,000 on account of such transaction, which deduction was disallowed in whole by the Commissioner in determining the deficiency in question.

Order of redetermination will be entered on 10 days’ notice, under Bule 50.