
    Gilbert H. Pearsall, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 11997.
    Promulgated February 2, 1928.
    
      Jesse I. Miller, Esg., for the petitioner.
    
      Henry Bavenel, Esg., for the respondent.
   OPINION.

Aeundell:

From the foregoing statement of facts it is apparent that the Railway Specialty Co. was insolvent in 1921. At that time it had a deficit of $50,000, with an uncollectible account receivable of about $60,000; it was unable to sell its manufactured product; it could not pay overdue interest on borrowed capital; and its stockholders apparently did not have sufficient confidence in its ability to recover to invest additional money in the enterprise. Additional evidence of the worthlessness of the stock is found in the unsuccessful attempt made by the petitioner in the fall of 1921 to find a purchaser for his holdings at any price. Developments subsequent to 1921 confirmed the opinion.

The stock was worthless at the close of 1921 and the cost thereof was a deductible loss occurring in that year. See Henry M. Jones, 4 B. T. A. 1286, and Harry H. DeLoss, 6 B. T. A. 784. The fact that petitioner found some one in the following year who was willing to take a flyer on the stock at a nominal price does not change the situation or make the loss any the less definite and ascertained in the prior year.

Judgment will be entered on 16 days’ notice, wider Rule 60.  