Appeal of Krack

[1120] OPINION. Green : We are unable to agree with the taxpayer in his contention that the advances should be charged off as bad debts. To be deductible in the years in question the debts must meet the requirements of section 214(a) (7) of the Kevenue Act of 1918, which is, “ Debts ascertained to be worthless and charged off within the taxable year.” In any year there were assets sufficient to have satisfied a part of the taxpayer’s claim, and this fact was known to him at all times. The disinclination of a creditor to force payment does not make a debt “ worthless,” as that term is used in the Act. The taxpayer’s contention that he has sustained a loss as the result of purchasing the stock is answered by saying that he still holds the stock of a going concern which hopes to show a profit for 1925. The transaction is not closed. The loss, if any, has not been realized. The taxpayer can have no deductible loss until such loss has been actually sustained.