United States v. H. F. Keeler and Alice H. Keeler, His Wife

H. F. Keeler (hereinafter referred to as the taxpayer) and his wife, Alice H. Keeler, brought this action in the district court to recover income taxes paid by them for the year 1955 as a result of the refusal of the Commissioner of Internal Revenue to allow in full certain losses as deductions in the computation of their income. The case was tried in the district court before a jury,- and the district court directed a verdict allowing taxpayer a deduction of $88,--588.90 in full as a business bad debt under the provisions of § 166 of Title 26, U.S.C.A. The district court refused to allow taxpayer a further deduction of $13,694.99 in full as a loss sustained in a transaction entered into for profit or a loss related to his business within the meaning of § 165 of Title 26, U.S.C.A. From the allowance of the $88,588.90 deduction in full, the government appealed, and from the refusal to allow the $13,694.99 deduction in full, the taxpayer cross appealed. Jurisdiction of the district court is conferred by 28 U.S.C. § 1346 and § 1402, and jurisdiction of the appeal and cross appeal is conferred on this court by 28 U.S.C. § 1291 .

The appeal and cross appeal will be treated separately…