holding that corporate stock was worthless even though the corporation held valuable assets because the taxpayer proved that corporate stock had no liquidating or potential future value
How later courts described this case
- holding that corporate stock was worthless even though the corporation held valuable assets because the taxpayer proved that corporate stock had no liquidating or potential future value
- noting that uncontroverted expert testimony that stock was worthless in a given year supported taxpayer’s worthless stock deduction
- including appointment of a receiver, cessation of normal business operations, bankruptcy, and liquidation as examples of identifiable events
- bankruptcy filing is an identifiable event indicative of worthlessness
Written by the judges who cited it.
The opinion
SimtsON, J., concurring: I agree with the holding that the loss was allowable in 1962, but I reach that decision for reasons different from those of the majority.
In cases sucli as this, it is often impossible to find the time when the stock clearly became worthless; there is likely to be a range of times, any one of which would be reasonable and defensible. Since the stock did become worthless some time, a loss is deductible for some year, and it seems unfortunate to have a taxpayer required to spend money and time defending the year chosen by him and to have the respondent spending the resources of his staff challenging the year selected by the taxpayer.
I would like to see the courts avoid these controversies by adopting a different standard of judicial review. If the taxpayer has a good reason for selecting the year chosen by him, that should be sufficient. Of course, if he selects a year solely because he derives the greatest tax advantage by claiming a deduction in that year, that is not a good reason. On the other hand, if the year chosen by him is within the realm of reason, it seems foolish to have the respondent or the courts pass judgment upon his selection and substitute their judgment for his.
If I had to choose a year in this case — 1962, 1963, or 1964, I doubt that I would choose 1962. However, it is within the realm of reason, and the taxpayer apparently chose it for sufficient reasons. Therefore, I would accept his choice and allow the deduction for that year.