Melick v. Commissioner , 6 B.T.A. 70 ( 1927 )

OPINION.

Littleton :

We think the petitioner has shown that he sustained a loss in 1921 of the cost of the stock owned by him in the Atlas Bank. He and the president and the cashier of the bank testified in detail concerning the affairs and condition of the Atlas Bank during 1921; the secretary of the Department of Trade and Commerce of Nebraska explained that Department’s relation with the bank. Petitioner and other officers of the bank who were thoroughly familiar with its condition and assets testified positively that they knew the bank was hopelessly insolvent in November and December, 1921, and that they had not the faintest hope that it could be saved. The control and management of the bank was taken from them in November, 1921.

As early as November of that year the bank was unable to meet its drafts. Debtors of the bank were unable to pay their loans already due, and collaterals which the bank held were practically if not entirely worthless. They determined that at least $310,000 of such loans were worthless. They knew that other loans soon to become duo would likewise be worthless on account of agricultural conditions.

Petitioner had an investment of $17,500 in the 200 shares of stock of the Atlas Bank of Neligh, Nebraska, and the Board is convinced from a consideration of all the evidence that this investment was a loss in 1921. He was therefore entitled to deduct that amount from gross income for that year as a loss sustained under the provisions of section 214 of the Revenue Act of 1921.

Judgment will he entered on 15 days’ notice, wider Rule 50.