Lang v. Commissioner

JOHN H. LANG, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Lang v. Commissioner Docket No. 14370. United States Board of Tax Appeals 12 B.T.A. 435; 1928 BTA LEXIS 3527; June 7, 1928, Promulgated *3527 Held, that the petitioner is entitled to a deduction in 1924 on account of stock becoming wholly worthless in that year. Phillip Katz, Esq., for the petitioner. Bruce A. Low, Esq., for the respondent. TRAMMELL *436 TRAMMELL: This is a proceeding for the redetermination of a deficiency in income tax for 1924 in the amount of $433.35. The deficiency arises from the action of the respondent in disallowing a deduction claimed in the amount of $9,000 on account of losses alleged to have been sustained by the petitioner during 1924 in the purchase of stock in the corporation. FINDINGS OF FACT. The petitioner is a resident of New York City. Commencing in the month of February, 1924, and ending in the month of August, 1924, the petitioner purchased stock in the American Repertoire Theatre Co., Inc., a New York corporation, for a total of $9,000. The corporation was organized for the purpose of producing theatrical attractions and plays. The corporation produced a play or drama written by Dr. William I. Sirovich and known as the "Scheimers." This play was produced by said corporation in 1924 and was a failure and was withdrawn from the*3528 stage after a short run. All of the assets of the corporation, such as scenery, costumes, property, etc., were disposed of for the purpose of raising funds to pay off the debts of the corporation incurred in the attempt to make a success of the play, which debts included actors' salaries, expenses, etc. At no time were there any assets to be distributed to the stockholders. The stock became wholly worthless in 1924 and the petitioner is entitled to the deduction claimed in that year with respect thereto. Judgment will be entered under Rule 50.