The opinion
WHITAKER, Judge
(concurring).
In Bowles Lunch v. United States, 33 F.Supp. 235 , 91 Ct.Cl. 292 , the taxpayer claimed a deduction either under subsection (f) or (j) of section 23 of the Revenue Act of 1928. The first allowed a deduction for a loss sustained in a non-business transaction entered into for profit, and the second, on account of a bad debt.
The plaintiff in that case had sold a piece of property, a part of the consideration for which was secured by a mortgage on the property sold. When it became apparent that the purchaser could not pay the balance due, plaintiff accepted a deed to the mortgaged property and cancelled the debt. Judges Littleton and Green and the then Chief Justice and I thought the transaction fell within the category of transactions entered into for profit, and allowed the deduction under this subsection, rather than under the subsection allowing the deduction of a bad debt.
In arriving at this conclusion, we were influenced by two things: one, the debt had been satisfied by the acceptance of a deed to the property; and, second, article 354 of Regulations 74 of the Internal Revenue Bureau allowed the deduction of a loss where property securing a debt had been repossessed. The article of the Regulations relied on is no longer in effect.
Unquestionably there was a loss in a transaction entered into for profit, but it is also true that the loss arose because of the inability of the debtor to pay the debt in full.
An argument can be made for placing the transaction in either one of the two categories, as the decisions cited in the Bowles Lunch decision and in the majority opinion in this case show. Now the fact that the debt was satisfied seems to have lost its influence over Judge Littleton, and he and the other judges seem to feel that the transaction in the case at bar falls more appropriately in the bad debt category. That it can be so classified must be admitted, and perhaps correctly so. I concur.