DocketNumber: Docket No. 13429.
Citation Numbers: 8 T.C.M. 556, 1949 Tax Ct. Memo LEXIS 158
Filed Date: 6/9/1949
Status: Non-Precedential
Modified Date: 11/20/2020
Memorandum Findings of Fact and Opinion
The respondent determined a deficiency in income taxes for the fiscal year ended November 30, 1942, in the amount of $2,325.32 as the result of his disallowance of a claimed deduction for war loss under
The facts in this proceeding, being all stipulated, are not in dispute. We adopt the stipulation filed as our findings of fact.
Findings of Fact
The petitioner, a former Polish national, and now a citizen of the United States, is an individual residing at Elmhurst, *159 New York. His income tax return for the period here involved was filed with the collector of internal revenue for the first district of New York.
Beginning in 1930 the petitioner owned and operated a ribbon factory situated in the City of Lodz, Poland. It is stipulated that petitioner's adjusted cost basis for the factory was not less than $12,675.96. It is not stated at what date that adjusted cost basis applied.
On or about September 1, 1939, the factory was seized by the German Army when it invaded Poland. The Germans were in possession of the factory and operated it without interruption from September 1939 until January 1945, when they were forced to relinquish it. During their possession of the factory, the Germans enlarged and improved it.
The Germans were in possession of and operating the factory on December 11, 1941, the date of the declaration of war on Germany by the United States. At no time during the period of the German occupation did the petitioner have possession or control of the factory.
The records of the Polish Government indicate that title to the factory was in the petitioner after the expulsion of the Germans in January 1945. In February 1945 the factory*160 was taken over by the Polish Office of Temporary Management, which entrusted it to a board of managers. On January 28, 1947, the Municipal Commission for Nationalization in Lodz nationalized the property.
On or about October 15, 1945, petitioner filed a claim against the Polish Government for the factory at the time it was taken over by the Polish Office of Temporary Management.
Opinion
LEMIRE, Judge: The only issue in this proceeding is whether petitioner is entitled to the deduction of a war loss claimed on certain property in Poland under
"* * * Property within any country at war with the United States, or within an area under the control of any such country on the date war with such country was declared by the United States, shall be deemed to have been destroyed or seized on the date war with such country was declared by the United States."
Since the property here involved was located in Lodz, Poland, an area within German control on December 11, 1941, the date of the declaration of war upon Germany by the United States, the question here is whether petitioner's property*161 was "destroyed or seized" on that date within the meaning of
In
"For property to be treated as resulting in a war loss, such property must be in existence on the date prescribed in section tion 127 (a) (2) as the date it is deemed destroyed or seized * * *, and for the taxpayer to claim a loss with respect to such property he must own such property or an interest therein at such time. If, before such time, the property was destroyed or confiscated,
We think that the intent*162 of
The petitioner argues that the German Army had no legal right to seize his property in 1939, that he was not divested of title, and that the likelihood of his recovery of the property was measured solely by the prospect of Allied success in World War II. He then argues that since he alone was vested with the rightful title to the property during the entire period of the German occupation of his property on the records of the Polish Government-in-Exile, the Germans were mere interlopers who deprived him of only temporary possession of the property.
Respondent argues that since the German Army seized petitioner's property in 1939 and was in uninterrupted possession and control of it from 1939 to 1945, petitioner had nothing to lose on December 11, 1941, having lost his property in 1939, when the Germans seized it.
The property's physical existence in 1945 after the Germans relinquished it evidences its existence on December 11, 1941, although petitioner himself*163 left it in 1939. Cf.
"* * * Under present conditions it is frequently impossible to determine when, if at all, the enemy country has formally seized the property located in an area under its control. Furthermore, enemy countries today exercise such control over the property of their enemies within their territory that the loss of such property is in fact sustained whether*164 or not the country undertakes the formality of issuing a sequestration decree on making an actual seizure. It is a matter of conjecture as to what condition the property will be in at the termination of the war. Accordingly, such property is treated as lost upon the date war is declared * * *." (Italics supplied.)
For the petitioner to establish his case for deduction of a war loss on December 11, 1941, he must prove the existence of the property on that date, his ownership of it, and the amount of the properly adjusted cost basis of the property on that date.
Petitioner contends that in
We think the cases are distinguishable. In the Abraham case the taxpayer did not lose his property before December 11, 1941, within*166 the meaning of
Since the petitioner lost his property in 1939 through seizure by the German Army he is not entitled under
Decision will be entered for the respondent.