FIRST NAT. BANK IN WICHITA v. Commissioner of Int. Rev., 262.
| Decision Date | 05 January 1931 |
| Docket Number | No. 262.,262. |
| Citation | 46 F.2d 283 |
| Parties | FIRST NAT. BANK IN WICHITA et al. v. COMMISSIONER OF INTERNAL REVENUE. |
| Court | U.S. Court of Appeals — Tenth Circuit |
A. M. Dean, of Arkansas City, Kan., for petitioner.
G. A. Youngquist, Asst. Atty. Gen., Sewall Key and A. H. Conner, Sp. Assts. to Atty. Gen. , for respondent.
Before LEWIS and COTTERAL, Circuit Judges, and POLLOCK, District Judge.
The facts out of which this controversy arose are these: Petitioner on June 20, 1923, purchased 25 shares of the capital stock of the Security National Bank of Arkansas City, Kan., paying therefor the full par value of the shares, $2,500. On or about the 11th day of September, 1923, petitioner received a notice from the board of directors of the bank that the Comptroller of the Currency had found the capital of the bank impaired to the extent of $40,956, and this amount should be made up by an assessment upon the shareholders of the bank, which assessment of 41 per cent. of the par value of the stock in the bank was made, and petitioner paid on his shares $1,025. This amount was ultimately lost to petitioner. In his income tax return for the year 1923 he deducted said amount from his total gross income for the year 1923. On June 30, 1925, the Commissioner of Internal Revenue notified petitioner this deduction would not be allowed. Against this decision petitioner protested. On the 12th day of August, 1925, the Commissioner, adhering to his former ruling, notified petitioner there was a deficiency in payment of his income tax for the year 1923 of $176.81, based on the deduction from his gross income of the assessment on his stock in the bank. An appeal was allowed from this order and taken to the Board of Tax Appeals. On a hearing that Board upheld the order of the Commissioner, and petitioner appeals to this court.
The sole question for decision is this. Is an assessment made on the shares of capital stock of a national bank to repair a loss on its capital such a loss as may be deducted from gross income by a taxpayer under paragraph 5, § 214(a), Revenue Act 1921 (42 Stat. 240), which reads, as follows:
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