1948 U.S. Tax Ct. LEXIS 95">*95
Deductions -- Bad Debts -- Business or Nonbusiness --
11 T.C. 510">*510 The Commissioner determined deficiencies in income tax for 1944, as follows:
Docket No. 15707, Vincent C. Campbell | $ 811.97 |
Docket No. 15709, James E. Campbell | 1,122.21 |
Docket No. 15710, John Albert Campbell | 2,605.66 |
The only issue for decision is whether the Commissioner erred in holding that specified amounts were nonbusiness bad debts allowable as short term capital losses under
FINDINGS OF FACT.
The returns of the petitioners for 1944 were filed with the collector of internal revenue for the eighteenth district of Ohio.
The following amounts were claimed on those returns as deductions for bad debts due from the1948 U.S. Tax Ct. LEXIS 95">*96 Campbell Bros. Coal Co. of Akron, which became worthless during 1944: 11 T.C. 510">*511
Vincent C. Campbell | $ 4,370.84 |
James E. Campbell | 4,370.84 |
John Albert Campbell | 9,266.18 |
The Commissioner, in determining the deficiencies, held that the loss on the loans in each case represents a nonbusiness bad debt which is allowable as a short term capital loss under the provisions of
The three petitioners have been engaged since 1929 in organizing, owning, and operating corporations engaged in the retail coal business in Cleveland, Detroit, and Akron. They had 12 such corporations. It was their practice as a part of their business to advance to, or leave with, those corporations on open accounts money belonging to them in many different instances. One of those corporations was the Campbell Bros. Coal Co. of Akron. The loans to that company which are here in question are similar to loans made to others of their companies. The loans due from the Campbell Bros. Coal Co. of1948 U.S. Tax Ct. LEXIS 95">*97 Akron in the amounts claimed on the 1944 returns became worthless during 1944.
The bad debts resulting were business bad debts and were not nonbusiness bad debts.
OPINION.
The Commissioner in his brief attempts to argue matters inconsistent with his own determination as disclosed in the deficiency notices. He may not do that under the rules of the Court without affirmative pleadings on his part. It must be recognized, for the purpose of this proceeding, that the petitioners actually loaned the money to the Campbell Bros. Coal Co. of Akron, in the amounts claimed in their returns, and those amounts became worthless during 1944, because those facts are not only consistent with, but are essential to, the determination made by the Commissioner. The petitioners have properly deemed those matters not in dispute.
The only question at issue is whether those bad debts were business or nonbusiness bad debts within the meaning of