Ranney v. Commissioner , 16 B.T.A. 1399 ( 1929 )

W. R. RANNEY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Ranney v. Commissioner

Docket No. 7931.

United States Board of Tax Appeals

16 B.T.A. 1399; 1929 BTA LEXIS 2389;

July 19, 1929, Promulgated

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Held, upon authority of Harry E. Lutz,2 B.T. A. 484; John G. Paxton,7 B.T.A. 92">7 B.T.A. 92; and Warren E. Burns et al.,11 B.T.A. 524">11 B.T.A. 524, that an assessment against a stockholder of a national bank, made for the purpose of replacing the impaired capital thereof, is not a deductible loss within the meaning of section 214(a)(5) of the Revenue Act of 1921.

A. M. Dean, Esq., for the petitioner.

P. M. Clark, Esq., for the respondent.

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LANSDON

The respondent has asserted a deficiency in income tax for the year 1923 in the amount of $176.81. The only issue is whether an assessment against an owner of stock of a national bank for the purpose of replacing impaired capital thereof is a proper deduction from income in the year in which it is paid as a loss sustained in such year. The parties filed a stipulation of facts which the Board accepts and adopts as its findings of fact.

FINDINGS OF FACT.

Petitioner is an individual, and a resident of Arkansas City, Kans.

On or about June 20, 1923, petitioner bought, for $2,500, twenty-five shares of the capital stock of the Security National Bank of Arkansas City, Kans., the same having a par value of $100 per share.

On or about September 11, 1923, he received notice from the board of directors of the bank to the effect that the bank had received notice from the Comptroller of the Currency that its capital stock had become impaired to the extent of $40,956, and that in accordance with the provisions of law this deficiency must be made good by assessment upon the shareholders pro rata in accordance with the amount of the capital stock owned by each; and that said banking association had actually received from the Comptroller the aforesaid notice of impairment of capital stock.

The impairment amounted to approximately 41 per cent of the par value of stock outstanding, and the taxpayer's liability under section 5205 of the Revised Statutes of the United States was $1,025, which amount he paid to the bank on December 5, 1923.

OPINION.

LANSDON: The issue raised by the petitioner herein has been considered by the Board in several proceedings heretofore heard, and the decisions therein have all been adverse to the theory contended for here. ; ; . Cf. . Upon authority of such decisions the determination of the Commissioner is approved.

Decision will be entered for the respondent.