Giles E. Bullock and Katharine D. Bullock v. Commissioner of Internal Revenue, the E. C. Brown Company v. Commissioner of Internal Revenue

253 F.2d 715 Giles E. BULLOCK and Katharine D. Bullock, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. The E. C. BROWN COMPANY, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. Nos. 119-122. Dockets 24596-24599. United States Court of Appeals Second Circuit. Argued March 13, 1958. Decided April 7, 1958. Giles E. Bullock and Katharine D. Bullock, husband and wife, and The E. C. Brown Company, as taxpayers, petition for review of a decision of the Tax Court of the United States, 26 T.C. 276, in a consolidated case finding deficiencies in income taxes for the years 1947-1949, on the grounds (1) of failure of proof by Brown of claimed deductions for accelerated depreciation or obsolescence of machinery used in the manufacture of its product; (2) of lack of showing by Bullock of a tax-free exchange under I.R.C. 1939, § 112, 26 U.S.C. § 112, when Bullock made an exchange with Brown of shares of its stock for debenture bonds of the newly organized Velo-King, Inc., together with the conclusion that the bonds had a fair market value of $300,000 and were not worthless as claimed by the taxpayers; and (3) of failure by Brown to show an abuse of discretion by the Commissioner in holding a debt owed by Velo-King to Brown not partially worthless in 1949. Richard M. Buxbaum, Rochester, N. Y. (Frederick Thompson, Rochester, N. Y., on the brief), for petitioners. Sheldon I. Fink, Atty., Dept. of Justice, Washington, D. C. (Charles K. Rice, Asst. Atty. Gen., and Lee A. Jackson and Melva M. Graney, Attys., Dept. of Justice, Washington, D. C., on the brief), for respondent. Before CLARK, Chief Judge, HINCKS, Circuit Judge, and BRENNAN, District Judge. PER CURIAM. [1] The issues presented to the Tax Court turn essentially on the resolution of questions of fact. In his opinion, 26 T.C. 276, Judge Kern has carefully analyzed all the problems; his findings of fact are certainly not clearly erroneous and his conclusions are justified. We affirm on his opinion.