Inman-Poulsen Lumber Co. v. Commissioner of Internal Revenue

The respondent Commissioner made a determination of a deficiency in the income taxes of the petitioner, here called the Company, for the calendar year 1944. The portion of the deficiency here in dispute arises out of the Commissioner’s disallowance of a deduction in the amount of $47,368.76 which the Company claimed on account of an alleged debt to it which it asserted became worthless in that year. Petitioner sought a redetermination of the deficiency before the Tax Court on the ground that its deduction was allowable under § 23 (k) of the Internal Revenue Code.

The Tax Court approved the Commissioner’s determination of a deficiency and upon the petition to this court for a review thereof, petitioner now for the first time asserts that its deduction was proper under § 23(f).

For the reasons here stated we hold the petitioner’s claim cannot be sustained on either ground.

Petitioner is an Oregon corporation with its principal office at Portland and engaged in the lumber manufacturing business since its organization in 1904. Between the years 1929 and 1944 the Company made advances in regular amounts to eight or more of its stockholders including Mrs. Clara Inman de-Bruin, who…