Docket No. 12505. | B.T.A. | Oct 11, 1928

Lead Opinion

*925OPINION.

Siefkin :

The sole question in this proceeding relates to the time that a deduction for a loss may be taken when such loss is in litigation. The decedent deducted the amount of $67,626.54 in 1920 because in that year he placed that sum on his books as a liability, the *926amount having been determined by the auditor appointed by the court. It is not shown, however, that he did not continue to contest the liability or that the report of the auditor prior to approval or acceptance by the appointing court became binding upon him. On the contrary, it appears that the proceeding was kept open through 1921 (in which year an additional amount was found due from him) and into 1922, when the decedent compromised liabilities found by the auditor in the total amount of $120,771.63, by the payment of $85,000 and $3,800 legal fees. We conclude that the respondent properly denied the deduction for 1920. See Russel Wheel & Foundry Co., 3 B. T. A. 1168, 1170; Lane Construction Corporation., 4 B. T. A. 1133; Malleable Iron Range Co. v. United States, 65 Ct. Cls. 441; Consolidated Tea Co. v. Bowers, 19 Fed. (2d) 382; Dodge v. United States, 64 Ct. Cls. 178.

Judgment will be entered for the respondent.

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