Gussow, Kahn & Co. v. Commissioner

Murdock, J.,

dissenting: The prevailing opinion allows deductions for capital losses, representing all advances made by the petitioner to its wholly owned subsidiary except those made after the determination to liquidate the subsidiary. The advances were all of the same class and made for the same purpose. They should all be allowed as deductions, regardless of whether made before or after the determination to liquidate. The petitioner obviously made those after the determination to liquidate in order to bail itself out of the situation into which it had already gotten and to which it was committed. Cf. Daniel Cimbel, 36 B. T. A. 539; Shiman v. Commissioner, 60 Fed. (2d) 65. The affairs of the subsidiary had to be wound up, and the amounts of $300 paid on November 22 and $300 on December 8,1944, were paid during tbe taxable year for that purpose. That money was just as necessary and was just as lost as a part of the cost of the capital asset as the money previously advanced. The point is that the petitioner had to go on paying for this “asset” even after it had become worthless. George H. Stanton, 36 B. T. A. 112; C. H. White, 15 B. T. A. 1375, 1386-1387.

Black and OppeR, JJ., agree with this dissent.