New Amsterdam Holding Co. v. Commissioner

OPINION.

Abundell :

The evidence before us is convincing that there was no ascertainment of worthlessness of the claimed deduction in the year 1921. The primary debtor was practically without assets after the sale in 1914 under foreclosure proceedings of its partially constructed building, and there has been no proof that the corporation was in existence during the taxable year. Such assets as it did have after the sale were subsequently sold and the proceeds realized from the transaction were used to pay other financial obligations of the corporation. Even though we were to decide, as we do not, that Franklin Haynes was legally liable to the petitioner for the debt of the corporation under his oral contract of guaranty, we would nevertheless sustain the respondent’s determination, since Haynes’ testimony establishes the fact that he had no assets in 1914 and that his financial condition had not improved to any extent up to and including the year 1920. The circumstances which were known to the petitioner in 1921 were also known to it in years prior thereto.

Judgment will be entered for the respondent.