Pomeroy v. Commissioner

APPEAL OF GEO. S. POMEROY.

Pomeroy v. Commissioner

Docket No. 3161.

United States Board of Tax Appeals

2 B.T.A. 228; 1925 BTA LEXIS 2484;

June 30, 1925, Decided Submitted June 17, 1925.

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C. J. McGuire, Esq., and Wallace C. Magathan, Esq., for the taxpayer.

L. C. Mitchell, Esq., for the Commissioner.

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Before STERNHAGEN, LANSDON, and LOVE.

The taxpayer appeals from the determination of a deficiency in income taxes of less than $10,000 for the calendar year 1918, resulting from the disallowance of a deduction for an alleged worthless debt of $16,700 by the partnership of which he was a member.

FINDINGS OF FACT.

In 1918 the partnership of Dives, Pomeroy & Stewart, of which the taxpayer was a member, was the owner of certain bonds of the DuPont Land Co., which, according to its books, represented a cost to the partnership of $16,700. At the end of the year 1918, believing these bonds to be worthless, the partnership charged them off its books and deducted that amount on its partnership income-tax return. The facts upon which the partnership acted in writing off the amount were that, in response to inquiries, one broker had said that he had heard nothing about the bonds for some time, and another had said that he thought the bonds had no value; also, that there were rumors.

DECISION.

The determination of the Commissioner is approved.