Slater v. Commissioner
EDWARD J. SLATER, <emphasis typestyle="it">v.</emphasis> COMMISSIONER OF INTERNAL REVENUE
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Opinion of the Court
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*61 OPINION.
Lansdon :
The owner of corporate stock may deduct from his income for any taxable year losses that are sustained in the sale of such stock, or if there is no sale, by proof that the stock was worthless in such years. In Re Harrington, 1 Fed. (2d) 249; Appeal of Milton H. Bickley, 1 B. T. A. 544; Appeal of George W. Todd, 3 B. T. A. 327. In the instant proceeding the petitioner did not sell any part of his stock or otherwise dispose of the same in either of the taxable years. The corporation continued in business during such years and at all times had a considerable body of assets to offset its obligations to its stockholders and creditors. The loss, if any, that the petitioner sustained was not determined or ascertainable in either of the taxable years. There is no provision in the taxing statute which authorizes taxpayers to deduct from income a mere shrinkage in value of property not disposed of by sale or otherwise. See New York Life Insurance Co. v. Edwards, 271 U. S. 109 ; Haviland v. Edwards , 15 Fed. (2d) 445; Appeal of A. C. Krack, 1 B. T. A. 1119; Appeal of Charles E. Nauss, 4 B. T. A. 980; Thomas Barrett, Jr., v. Commissioner, 5 B. T. A. 989; W. P. Davis v. Commissioner, 6 B. T. A. 1267.
Judgment will he entered for the respondent.
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EDWARD J. SLATER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
Slater v. Commissioner
Docket No. 13372.
United States Board of Tax Appeals 12 B.T.A. 60 ; 1928 BTA LEXIS 3609 ; May 23, 1928 , Promulgated *3609 Losses resulting from shrinkage of value of the stock of a corporation which was a going concern in the taxable years disallowed as deductions from taxable income for such years.
Edward J. Slater pro se.
Benton Baker, Esq., for the respondent.
LANSDON *60 The respondent has asserted deficiencies in income tax for the years 1922 and 1923, in the respective amounts of $179.15 and $192.40. The only issue is whether certain shares of stock became worthless in the taxable years and, to the extent of their cost, were proper *61 deductions from gross income of the petitioner as losses sustained in such years and not compensated for by insurance or otherwise.
FINDINGS OF FACT.
The petitioner is the owner of 341 shares of the par value of $100 each, of the Nye Schneider Fowler Co., a corporation hereinafter referred to as the corporation, which he acquired prior to the taxable years at a cost of $35,881.82.
During the taxable years and probably both prior and subsequent thereto the corporation sustained losses and was unable to continue in business without the consent of its creditors. On August 20, 1921, its stockholders gave an option *3610 to certain parties for the purchase of all its stock at $42 per share. This option was never exercised and the corporation has ever since continued to conduct the business for which it was organized. It has not been financially successful in its operations. The value of the stock of the corporation in the taxable years can not be determined from the record.
OPINION
LANSDON: The owner of corporate stock may deduct from his income for any taxable year losses that are sustained in the sale of such stock, or if there is no sale, by proof that the stock was worthless in such years. In ; ; . In the instant proceeding the petitioner did not sell any part of his stock or otherwise dispose of the same in either of the taxable years. The corporation continued in business during such years and at all times had a considerable body of assets to offset its obligations to its stockholders and creditors. The loss, if any, that the petitioner sustained was not determined or ascertainable in either of the taxable years. There is no *3611 provision in the taxing statute which authorizes taxpayers to deduct from income a mere shrinkage in value of property not disposed of by sale or otherwise. See ; ; ; ; ; .
Judgment will be entered for the respondent.
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