Hallam v. Commissioner

APPEAL OF EDWIN C. HALLAM.

Hallam v. Commissioner

Docket No. 3582.

United States Board of Tax Appeals

2 B.T.A. 1220; 1925 BTA LEXIS 2124;

November 6, 1925, Decided Submitted August 27, 1925.

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">*2124 Edwin C. Hallam pro se.

James T. Dortch, Esq., for the Commissioner.

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Before JAMES, LITTLETON, SMITH, and TRUSSELL.

This is an appeal from the determination of a deficiency in income and profits tax for the year 1921 in the amount of $100.92.

FINDINGS OF FACT.

The taxpayer is an individual residing in New York City, and during the taxable year in question was one of two stockholders of a corporation known as the Brighton Beach Sporting Club, Inc., which carried on boxing contests at Brighton Beach during 1921. The stock of the corporation was issued for a lease and boxing license. The venture proved unsuccessful, and the taxpayer and his associate advanced money from time to time to make up deficiencies in connection with the business. The corporation finally abandoned the lease, the license, and all structural equipment such as the ring erected on the leasehold property, and nothing was realized therefrom. The corporation was not dissolved, but its charter was abandoned by its stockholders and no payments of license fees or otherwise were made to the State after the year 1921 for the purpose of maintaining the corporate charter. While the business">*2125 was being carried on the taxpayer advanced for the above purposes a total amount of $6,262.90, which amount was wholly uncollectible at the end of the year, at which time he charged off $6,500 as a debt ascertained to be worthless within the year and claimed a deduction therefor in his income-tax return.

The Commissioner disallowed this deduction. The difference between the actual amount advanced and the amount claimed represents small amounts alleged to have been advanced from time to time but not entered in the books, and no satisfactory evidence was introduced to indicate that the actual debt ascertained to be worthless and subject to charge off and deduction was in excess of the above amount of $6,262.90.

DECISION.

The deficiency determined by the Commissioner is disallowed.