Poor v. Commissioner

HENRY V. POOR, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Poor v. Commissioner Docket No. 14261. United States Board of Tax Appeals 11 B.T.A. 781; 1928 BTA LEXIS 3726; April 23, 1928, Promulgated *3726 John Drye, Jr., Esq., for the petitioner. A. S. Lisenby, Esq., for the respondent. LITTLETON *781 The Commissioner determined a deficiency of $294.78 for the calendar year 1920. Petitioner claims that the Commissioner erred in reducing a deduction claimed by him by the amount of $484.21, representing interest on a judgment obtained by him against one Charles B. Van Nostrand. FINDINGS OF FACT. Petitioner is a resident of New York. July 20, 1920, he obtained a judgment in the Supreme Court of New York against one Charles B. Van Nostrand, in the amount of $2,884,21. Thereafter, on July 30, an execution upon such judgment was issued against the property of the judgment debtor to the sheriff of the County of New York in which the judgment debtor then resided. The execution was thereafter in the year 1920 returned by the sheriff wholly unsatisfied. In his income-tax return for the year 1920, petitioner deducted from gross income as a bad debt the full amount of the judgment. The Commissioner reduced the amount claimed in the sum of $484.21, representing interest on the debt included in the judgment. Petitioner kept his books on a cash receipts*3727 and disbursements basis. The interest, amounting to $484.21, included in the judgment, had at no time been included by petitioner as income in any year. *782 OPINION. LITTLETON: The Board had heretofore had occasion to consider the question involved in this proceeding, wherein it was held that a taxpayer could not take as a deduction the loss of a gain which had not been reflected in income. ; . The Board is of the opinion that the cases mentioned preclude the allowance of the deduction of the interest on the judgment herein claimed by petitioner. Judgment will be entered for the respondent.