Erwin E. Hassen and Estate of Birdie B. Hassen, Deceased, Nathan Hassen, Administrator v. Commissioner of Internal Revenue
Opinion
Opinion
Ferguson, J.
This is an appeal from a decision of the United States Tax Court which held that appellants’ claimed deduction of a loss of $477,825.44 was barred by Section 267(a)(1) of the Internal Revenue Code. We hold that the tax court properly disallowed the loss. 63 T.C. 175 (1974).
FACTS
The facts are not in dispute. The parties stipulated to them in the tax court and they are, in relevant part, set forth below.
On March 18, 1955, Erwin E. Hassen and Birdie B. Hassen (the “Hassens”) purchased Golden State Hospital (“Golden State”) for $975,000. Although the property was a community asset, title to the property was taken in the name of Birdie B. Hassen. Subsequent to 1955, Mr. Hassen borrowed money from his sister, Betty Stein, and Mrs. Hassen as the nominal owner of the property executed a note and trust deed pledging Golden State to secure the loan. In 1958 Betty Stein transferred the note and trust deed to Pacific Thrift and Loan Company (“Pacific Thrift”) as an accommodation to Mr. Hassen in connection with his sale in 1958 of shares of stock of Pacific Thrift. Mr. Hassen did not own any interest in Pacific Thrift after 1958.