*1951 Loss sustained in loan transactions held to be deductible in 1922.
*1234 This proceeding results from respondent's determination of a deficiency of $513.53 in income tax for 1922. The error assigned is the refusal of the respondent to allow as a bad debt or loss deduction the sum of $7,500.
FINDINGS OF FACT.
The petitioner, a resident of Portland, Oreg., in March, 1919, loaned to J. M. Curtis the sum of $5,000, and in August of that year he loaned to him the additional sum of $5,000. The notes given by Curtis to evidence the loans were secured by chattel mortgages on growing wheat crops of the borrower in Montana, and two tractors.
In the fall of 1919 Curtis abandoned his crop of wheat and disappeared. Subsequently in 1919 petitioner took possession of the mortgaged property, and at the sale of the chattels under a foreclosure suit instituted by him acquired the property for the face amount of the notes.
In 1919 petitioner sold the wheat for $63.10 and in 1920 he disposed of one of the tractors for $2,500. The remaining tractor was placed*1952 in storage after repeated efforts had been made to sell it. While there, parts of the tractor were stolen, and in 1922 what remained of it was sold for junk. Petitioner expended the sum of $163.40 in connection with the acquisition and sale of the property.
In 1923 the petitioner paid taxes to the State of Montana on the tractor sold for junk in 1922.
Petitioner has not seen Curtis since 1919 and has not recovered anything on the notes since 1922.
OPINION.
ARUNDELL: The respondent is not questioning the fact that the petitioner sustained a loss of $7,500 in the loan transactions, but claims it was not suffered in 1922. The basis for his contention is testimony brought out in recross-examination of petitioner that in 1923 State taxes were paid on the tractor alleged to have been sold for junk in 1922. There is nothing in the testimony relied upon *1235 from which the conclusion could be reached that the taxes paid on the tractor were for the year 1923. The proof is that the wheat was sold in 1919 and one of the tractors acquired in the foreclosure proceedings was sold in 1920 and that the other tractor was sold for junk in 1922 after attempts had been made to*1953 sell it for other purposes. The respondent erred in refusing to allow the claimed loss as a deduction from 1922 income.
Decision will be entered under Rule 50.