38 F.2d 810 | 6th Cir. | 1930
The petitioner owned a large block of stock in the Goodyear Tire & Rubber Company, of whieh he was a vice president. In the latter part of 1920 he loaned to other employees of that company a part of this stock, taking receipts therefor in the following
The transactions were in the nature of loans for a specific purpose from which there arose obligations to repay in kind or, upon failure so to do, to pay the value. They do not fall within subsection 4 of section 214 (a) of the Act of 1918 (chapter 18, 40 Stat. 1067) for the reason, if for no other, that they were not made “in trade or business.” And this is true notwithstanding the petitioner, as an owner of Goodyear stock, was interested in maintaining its market price. They were loans made for the accommodation of the borrowers, against whom the obligations still exist. Furthermore, before one is entitled to a deduction under this provision of the statute, as also under the “bad debt” provision (subsection 7, section 214(a), the loss must have been “sustained,” Brewer v. Orr, 19 F.(2d) 230 (6 C. C. A.); United States v. White, 274 U. S. 398, 47 S. Ct. 598, 71 L. Ed. 1120, and there was no showing that any loss was sustained on the stock whieh was not sold.
The Commissioner allowed a loss on the Zeigler stock of its base value, whieh he fixed at $8.08 a share. This finding of value was sustained by the Board. The petitioner complains of it, contending that the true value was $12.1733 a share. The evidence does not show when this stock was acquired, what it cost, or, if it was acquired before March 1, 1913, its value of that date. The burden was upon petitioner to' establish his loss. His proofs on that point consisted of evidence of widely ranging prices paid for stock in this company over a period of ten years. This evidence quite as substantially sustains the value fixed by the Commissioner as that sought to be established by the petitioner.
The order of the Board is accordingly affirmed.