First National Bank, Parkers Landing v. Commissioner

[1388] OPINION. Sternhagen: The facts before us indicate nothing as to actual worthlessness of the bonds or that a loss was in fact realized. The single reason for “ charging them off ” was an order of a national bank examiner. This does not prove either a loss sustained, under section 234 (a) (4) or a debt ascertained to be worthless under section 234 (a) (5), Revenue Act of 1921, Murchison National Bank, 1 B. T. A. 617; Farmers & Traders Bank, 4 B. T. A. 753; Continental Trust Co., 7 B. T. A. 539, 554. Nor are the facts sufficient to show the extent to which the debts, if they were to be treated as such under the revenue act, were recoverable only in part, so as to allow partial charge-off. The Board has recently held in respect of certain Russian bonds that, although debts, no deduction could be taken unless the loss provision of the statute were fulfilled. First National Bank of St. Paul, 10 B. T. A. 32. Here we have only an inference of reduced market value of property still in possession and accounted for as an asset, and this inference arising not from evidence as to the bonds themselves but from an order of a national bank examiner for the purpose presumably of conservative accounting. The respondent is sustained. Judgment will be entered under Rule 50.