A loss sustained by a corporation upon foreclosure sale of its
mortgaged property
held, in computing taxable income under
the Revenue Act of 1934, deductible only to the limited extent
allowed by §§ 23(j) and 117(d) for losses from "sale" or exchanges
of capital assets.
Helvering v. Hammel, ante, p.
311 U. S. 504,
followed. P.
311 U. S. 514.
110 F.2d 614 affirmed.
Certiorari, 310 U.S. 622, to review the reversal of a decision
of the Board of Tax Appeals redetermining a deficiency in income
tax.
MR. JUSTICE STONE delivered the opinion of the Court.
This is a companion case to
Helvering v. Hammel, ante,
p.
311 U. S. 504.
The question is whether the loss suffered by petitioner on
foreclosure sale of his mortgaged property, acquired for profit,
may be deducted in full from gross income, or only to the extent
provided by § 117(d) of the 1934 Revenue Act. The statutory
provisions involved are those of the 1934 Act relating to capital
gains or losses, particularly "losses from sales or exchanges of
capital assets," considered in the
Hammel case, which are
made applicable to petitioner, a corporation, by § 23(f), (j).
Page 311 U. S. 514
The Board of Tax Appeals ruled that petitioner's loss was
deductible in full from its ordinary income. The Court of Appeals
for the Second Circuit reversed the Board, 110 F.2d 614, holding
that the loss sustained by petitioner was a loss from a sale of
capital assets, § 23(j), which, under § 117(d), could be deducted
from the gross income only to the extent of capital gains plus
$2,000. We granted certiorari, 310 U.S. 622, so that the case might
be considered with the conflicting decision of the Court of Appeals
for the Sixth Circuit in the
Hammel case, 108 F.2d 753.
For the reasons stated in our opinion in the
Hammel case,
we think that this case was rightly decided below.
Affirmed.
MR. JUSTICE ROBERTS dissents.