
    Van Smith Building Material Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 19852.
    Promulgated June 3, 1929.
    
      J. B. Grice, G. P. A., for the petitioner.
    
      B. M. Goon, Esq., for the respondent.
   OPINION.

Milliken:

The only question for decision in this case is whether the deposit which petitioner had with the Enterprise Bank was ascertained to be worthless and charged off within the year 1921. There can be no dispute that petitioner charged off the debt as worthless, and the remaining question is whether it ascertained it to be worthless or if it was in fact worthless at the close of the year in question. The respondent has allowed the deduction for the year 1922, when the bank was finally closed.

Counsel for petitioner was given two extensions of time within which to file a brief. No brief has been filed, and we are therefore not informed as to his views.

The evidence (depositions) in this case beyond question shows that petitioner suffered a loss by reason of its deposit in the Enterprise Bank. The bank was not closed until November 1, 1921, and was reopened on December 1,1921, pursuant to an agreement entered into by practically all the depositors whereby they allowed their deposits to remain with the bank for one year in the hope that in the interim the bank’s financial condition would show improvement. The petitioner not only allowed its then deposit to remain, but apparently had enough confidence in the bank to maintain an additional checking account with it when it reopened. Petitioner seeks to take as a bad debt deduction in the year 1921 the whole of the deposit and yet subsequent to that year it received back by wajr of liquidation approximately 15 per cent of its deposit and the attorney for the bank testified that liquidation was to this date still in process.

When the bank closed and reopened in 1921, it had many loans that had not then matured and it seems petitioner made no investigation of the amount of the loans or the possibility at date of maturity of their payment.

On the caso as a whole we can not say that the deposit in its entirety was worthless at December 31, 1921, and accordingly approve the determination of the respondent.

Judgment will be entered for the resfondent.  