dissenting: Article 171 of Regulations 74, relating to deductible losses, contains, among other things, this language: “ Losses must usually be evidenced by closed and completed transactions.”
To constitute a completed sale of stock on a stock exchange there must be delivery. See G. C. M. 12570, C. B. XIII-1, p. 114. In this memorandum the General Counsel of the Bureau of Internal Revenue ruled that where a contract to sell stock on a stock exchange was entered into on December 31,1930, and delivery of the stock was made in the regular way on January 2, 1931, the loss, if any, was incurred in the year 1931 and constituted a proper deduction for that year. In this ruling, I think the General Counsel was correct.
In Charles W. Dahlinger, 20 B. T. A. 176; affd., 51 Fed. (2d) 662, we said: “Although a contract to sell is consummated when the parties execute it, a sale, even where the subject of a contract, is incomplete and imperfect until title passes. But a sale is complete when title passes * *
In the instant case there appears to be no evidence that petitioner made any delivery, either actual or symbolical, in 1929, of the 800 shares sold. Quoting from the majority opinion: “ December 27, petitioner instructed his broker £to sell for him the eight hundred (800) shares of Continental Can Company stock represented by the certificates which remained in his safe deposit box.’ ” Whatever might have been his intentions as to the delivery of these 800 shares of stock represented by the certificates which were then in his safe-deposit box, petitioner did not deliver them. He evidently changed his mind and converted what appears to have been an intention to sell shares of which he was actually possessed, into a short sale, because what he actually did was to cover his sale of 800 shares in 1929 by purchases of 1,500 shares of the same stock on January 31 and February 3, 1930. After petitioner had made these later purchases, the 800 shares which he had sold in December 1929 were subtracted therefrom and the broker delivered to him 700 shares representing the balance of his 1930 purchases. These 700 shares, the majority opinion states, “ petitioner put in his box with the aforesaid certificates for 800 shares.”
Under these circumstances, it seems to me that petitioner is in no position to claim a loss on the sale of 800 shares of Continental Can Co. stock in 1929. If what petitioner actually did in these transactions is to be construed as a short sale of the 800 shares in question, then it is clear petitioner could not claim any loss in 1929. Cf. Robert W. Bingham, 27 B. T. A. 186. But whether the transaction be treated as a short sale or as an ordinary sale, there was no com*728pleted transaction in 1929 and the claimed loss is not deductible. Charles H. Oshei, 31 B. T. A. 23; Beardsley Ruml, 31 B. T. A. 534.
In the latter case, among other things, we said:
The petitioner’s counsel would have us completely ignore the iaet that a “ short ” sale was effected in 1928 of the 2,500 shares of stock in question. This he dismisses with the explanation that “ There is no magic in the word ‘ short ’ ”, which, he says, was used by the broker to “ signify that delivery of the stock was yet to be made.” Furthermore, notwithstanding his ease must rest upon the proposition that there was a closed and completed sale in 1928, he would also have us ignore the fact that there was no delivery of the stock until the following year. Neither of which may we do.
In the instant case, as I construe the transaction, there never was any delivery of the 800 shares which petitioner says he instructed his broker to sell. The contract of sale was covered by purchases in 1930 and petitioner remained possessed of the same certificates for 800 shares which he had in his deposit box at the time he gave his broker orders to sell, December 27, 1929. Under these circumstances it seems to me there is no better ground to allow petitioner’s claimed loss than there was in the Oshei and Bwnil cases, in both of which we denied the losses claimed in the taxable years which were before us.
Decision should be for the respondent.
Smith, ARUNDell, and TURNER agree with this dissent.