Shaffer v. Commissioner

*909OPINION.

Sea well :

The only alleged error insisted upon by the petitioner is the disallowance of a claimed loss of $2,330.11 in 1923, growing out of the $2,500 stock transaction detailed in our findings of fact.

The evidence shows that the petitioner in 1920 paid one Ehoades $2,425 for an interest in an oil-production lease from which, as a return thereon, he received in 1922 or prior thereto only $169.89, the venture, as stated by the petitioner, resulting in failure.

In 1922 Ehoades organized a corporation, the Ehoades Oil Pro- • ducing Co., petitioner assigning to the same his interest in the oil-production lease or agreement with Ehoades and receiving from him 25 shares of the stock, of a par value of $100 each. It is on this $2,500 }3ar value stock that the petitioner asserts he suffered the alleged loss of $2,330.11 in 1923, when the Ehoades Oil Producing ■ Co. made an assignment to trustees for the benefit of its creditors, its stock being then worthless. The evidence, however, fails to show when the stock became worthless, whether it became so in 1922 or 1923 or whether it ever in fact had any real value at the time of its issuance in 1922.

One of the trustees under the assignment made by the Ehoades Oil Producing Co. in 1923 testified, basing his statement on his *910knowledge of tbe corporate books of the company, that the stock never had any real value, because the company was insolvent at the time the stock was issued. The petitioner, in writing a revenue agent relative to his (petitioner’s) original investment and the alleged loss of $2,330.11 in the “ Bhoades Oil Company,” made the statement — sworn to — that “ the venture was a failure ” and that Bhoades organized the Bhoades Oil Producing Co. and issued stock to him in the amount of $2,500, par value, to recompense, according to Bhoades’ claim, him “ for the loss on the original venture.”

That petitioner sustained a loss approximating the amount he claims is evident and, taking into consideration all the facts and circumstances, we can see there may very well have been some doubt and confusion in the mind of the petitioner as to how and when he should claim he sustained the loss. Viewing the matter in the most favorable light for the petitioner, and considering that he experienced no gain or loss when he assigned or exchanged his interest in the oil-production agreement which he had with Bhoades for the stock of $2,500 par value in the Bhoades Oil Producing Co., the evidence is wholly lacking to show that such stock, if it then had any value, did not become worthless in 1922 instead of 1923, when the petitioner claims his alleged loss. If the stock never had any value, petitioner’s loss was sustained prior to 1923. The Commissioner disallowed the claimed loss on said stock as occurring in 1923, and there being no evidence to overcome the correctness of his action in that respect, his determination of deficiency in tax is approved.

Judgment will loe entered for the respondent.