Deputy v. DuPont
(1940)
DEPUTY, ADMINISTRATRIX, ET AL. v.
du PONT
No. 151
SUPREME COURT OF THE UNITED STATES
308 U.S. 488; 60 S. Ct. 363; 84 L.
Ed. 416; 40-1 U.S. Tax Cas. (CCH) P9161; 23 A.F.T.R. (P-H) 808; 1940-1 C.B.
118; 1940 P.H. P62,015
December 12, 1939, Argued
January 8, 1940, Decided
PRIOR HISTORY: CERTIORARI TO THE CIRCUIT COURT OF
APPEALS FOR THE THIRD CIRCUIT.
CERTIORARI, post, p. 533, to review the reversal of a
judgment of the District Court rendered against the present respondent in
his action to recover money collected as income taxes.
DISPOSITION: 103 F.2d 257, reversed; 22 F.Supp. 589,
affirmed.
CORE TERMS: stock, stockholder, indebtedness,
deductible, conserving, enhancing, expenditure, lender, carrying charges,
borrowed, carrying, selling, usual, gross income, accrued, import, loaned,
net income, dividends, dividends received, interest paid, taxable year,
deducted, stock purchase, proximately, beneficial, borrowing, obligated,
assist, sell
SYLLABUS: . In calculating net income for
taxation a deduction from gross income is allowable only if there
is clear statutory provision therefor. P. 493.
2. In determining what are "ordinary and
necessary" expenses of a taxpayer's "trade or business,"
within the meaning of @ 23 (a) under the Revenue Act of 1928, resort is
had to the popular or received import of those words. P. 493.
3. An ordinary expense is one that is normal, usual or
customary; a transaction that gives rise to it must be of common or
regular occurrence in the type of business involved. P. 495.
4. The fact that an expense would be an ordinary and
common one in the course of one business does not necessarily make it such
in connection with another business. P. 495.
5. Carrying charges on short sales of stock made by a
stockholder to assist his corporation and preserve his investment in it
can not be deducted as ordinary and necessary expenses of his business
where it does not appear that he was in the business of trading in
securities, or that stockholders, engaged in conserving and enhancing
their estates, ordinarily assist their corporations in similar fashion.
Pp. 493 et seq.
6. In order to aid a plan of his corporation to
increase the efficiency of its management by selling some of its stock to
executive employees -- the corporation not being able legally to sell
directly -- and to the end that by the plan his beneficial interest in the
corporation might be conserved and enhanced, a stockholder made short
sales to the executives (the corporation lending them the price) and
borrowed the shares requisite to fulfill his contracts; when the borrowing
period was up he restored equivalent shares to the lender by borrowing
them elsewhere under a contract which in time obliged him to pay to the
second lender (a) a sum equal to dividends received by him on the borrowed
shares, and (b) a sum equal to the lender's income tax on such payments.
Assuming that the activities of the stockholder in conserving and
enhancing his estate constitute a "trade" or
"business" within the meaning of @ 23 (a) of the Revenue Act of
1928, held:
(1) That these expenditures were not deductible in
computing the
stockholder's income because they proximately resulted
not from the taxpayer's business but from the business of the corporation,
and because they were neither "ordinary" nor
"necessary" expenses of his business within the meaning of @ 23
(a). Pp. 494 et seq.
(2) Such expenditures were not deductible as
"interest paid or accrued . . . on indebtedness" under
subsection 23 (b) of the Act. P. 497.
7. Although an indebtedness is an obligation, an
obligation is not necessarily an "indebtedness" within the
meaning of @ 23 (b). Interest in its usual import is the amount which one
has contracted to pay for the use of borrowed money. In the business world
interest on indebtedness means compensation for the use or forbearance of
money. It is assumed that Congress has used the words in that sense. P.
497.
COUNSEL: Mr. Robert K. McConnaughey, with whom
Solicitor General Jackson, Assistant Attorney General Clark, and Messrs.
Sewall Key, Newton K. Fox, and Richard H. Demuth were on the brief, for
petitioners.
Mr. George Wharton Pepper, with whom Mr. James S. Y.
Ivins was on the brief, for respondent.
JUDGES: Hughes, McReynolds, Butler, Stone, Roberts,
Black, Reed, Frankfurter, Douglas
OPINIONBY: DOUGLAS
OPINION: MR. JUSTICE DOUGLAS delivered the opinion of
the Court.
This case presents the question of whether respondent
in computing his taxable net income for the year 1931 may deduct payments
of $ 647,711.56 made by him in that year to the Delaware Realty and
Investment Co. (hereinafter called the Delaware Company). The deduction is
sought either under @ 23 (a) of the Revenue Act of 1928 (45 Stat. 791) as
"ordinary and necessary expenses paid or incurred during the taxable
year in carrying on" the "trade or business" of respondent;
or under @ 23 (b) as "interest paid or accrued within the taxable
year on indebtedness." The Commissioner disallowed the deduction and
determined a deficiency, which respondent paid and now seeks to recover.
It is agreed that if the deduction is allowed, respondent is entitled to
judgment for $ 172,351.64. The judgment of the District Court against
respondent, 22 F.Supp. 589, was reversed by the Circuit Court of Appeals,
103 F.2d 257. We granted certiorari because of the asserted inconsistency
of that ruling with Welch v. Helvering, 290 U.S. 111, which construed the
meaning of the words "ordinary and necessary expenses"; and with
Burnet v. Clark, 287 U.S. 410, which limited such deductions to losses
directly connected with the taxpayer's business.
Respondent's claim to the deduction arose out of the
following transactions, briefly summarized. Respondent was beneficial
owner of about 16% of the stock of E. I. du Pont de Nemours and Company
(hereinafter called the du Pont Company). In 1919 the du Pont Company
constituted a new executive committee composed of nine young men. For
business reasons, it thought it desirable that these men have a financial
interest in the company. Alleged legal difficulties stood in the way of
the du Pont Company selling them the 9,000 shares desired. n1 Accordingly,
respondent undertook to sell them 1,000 shares each. But since he did not
have readily available that amount from his own holdings, n2 he borrowed
9,000 shares of the du Pont Company from Christiana Securities Company, n3
under an agreement whereby he agreed to return the stock loaned in kind
within ten years and in the interim to pay to the lender all dividends
declared and paid on the shares so loaned. n4 Respondent thereupon sold
the shares to the nine executives, the purchase price being furnished by
the du Pont Company. n5 In October, 1929 when the ten-year period was
about to expire, respondent did not have available the number of shares
which he was obligated to return to Christiana Securities Company. n6
Therefore, he arranged for a loan from the Delaware Company of the number
of shares necessary to discharge that obligation. n7 Under a contract with
that company, respondent agreed to return in kind the number of shares
loaned (plus any increase by stock dividend or otherwise) within ten
years; to pay to the Delaware Company an amount equivalent to all
dividends declared and paid on the borrowed shares until returned; and to
reimburse the Delaware Company for all taxes accruing against it by reason
of the agreement.
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n1 As stated by the District Court, counsel advised
that the du Pont Company could issue stock only for money paid, labor
performed, or real or personal property acquired; and that if the stock
were to be issued for cash, it must first be offered to existing
stockholders. According to the findings the du Pont Company did not have
9,000 shares of its stock, other than unissued stock; that stock was not
then listed on the New York Stock Exchange; and the over-the-counter
market was quite inactive. Nine thousand shares could not have been
purchased on this market without substantially raising the price per
share.
n2 Respondent had available only seventy-four shares.
He had a reversionary interest in two trusts which held 24,000 shares. And
he was the owner of 29,125 shares of common stock of Christiana Securities
Company out of a total of 75,000 shares issued and outstanding. That
company was then the owner of 183,000 shares of common stock of the du
Pont Company out of a total of 588,542 shares issued and outstanding.
n3 Supra, note 2.
n4 As security respondent gave Christiana Securities
Company 3,800 shares of its capital stock. All dividends on that stock
were to be paid to respondent.
n5 These sales were made at the price of $ 320 a
share, that being approximately their book value. The du Pont Company
loaned to each of the nine executives the necessary funds to purchase his
1,000 shares. They paid respondent $ 2,880,000 in cash for the 9,000
shares. According to respondent's brief, he turned over this sum through
transactions in General Motors stock which ultimately yielded him a great
profit. See du Pont v. Commissioner, 37 B. T. A. 1198.
By March 1921, the stock of the du Pont Company had
declined in value and the bargain made by the executives had become a
disadvantageous one. Respondent thereupon offered to turn over 400 shares
of the Christiana Securities Company (of a net value of $ 160,000) to be
held by the du Pont Company as additional collateral on the loan made to
these executives, respondent to have the right to redeem those 400 shares
by payment of $ 160,000 on maturity of the loan, that payment, if made, to
be applied to the loan. If respondent failed to redeem those shares, they
were to become the property of the executives on payment of their loans.
Meanwhile dividends on the 400 shares up to $ 8,000 per annum were to go
to the executives, the balance to respondent who was, however, to return
his portion to the executives if he did not redeem the stock. This offer
was accepted by the executives. Respondent when he proposed it, stated
that he did so "as a large stockholder, and, perhaps, the one to be
most benefited by the recovery in value of the Company's shares." He
also stated that he wanted the executives to be "free of worry over
the unexpected outcome" of the stock purchase plan.
n6 Due to stock dividends and split-ups respondent was
obligated to return to Christiana Securities Company 142,212 shares to
replace the 9,000 shares which he had borrowed.
n7 Respondent was not a stockholder of the Delaware
Company, although it appears that his brother was one of its executive
officers.
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Pursuant to that agreement respondent paid the
Delaware Company in 1931, the sum of $ 567,648, being an amount equivalent
to the dividends received by him during that period from the du Pont
Company on the borrowed shares; and the sum of $ 80,063.56, being the
amount of the federal income tax imposed upon the lender by reason of the
foregoing payments which it had received from respondent. These are the
expenditures claimed as a deduction in the present suit.
The District Court concluded, on the basis of
respondent's large and diversified investment holdings and his wide
financial and business interests, that his business was primarily that of
conserving and enhancing his estate. The petitioners challenge that
conclusion, asserting that respondent's activities in connection with
conserving and enhancing his estate did not constitute a "trade or
business" within the meaning of @ 23 (a) of the Act.
But as we view the case it is unnecessary for us to
pass on that contention and to make the delicate dissection of
administrative practice which that would entail. For we are of the opinion
that the deductions are not permitted either within the rule of Burnet v.
Clark, or Welch v. Helvering, supra, even though we were to assume that
the activities of respondent constituted a business, as found by the
District Court. There is no intimation in the record that the transactions
whereby the stock was borrowed were not in good faith or were entered into
for any reason except a bona fide business purpose. Nor is there any
suggestion that the transactions were cast in that form for purposes of
tax avoidance. And it is true that as respects the dividends received by
respondent and paid over to the Delaware Company, he was little more than
a conduit. But allowance of deductions from gross income does not turn on
general equitable considerations. It "depends upon legislative grace;
and only as there is clear provision therefor can any particular deduction
be allowed." New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440.
And when it comes to construction of the statutory provision under which
the deduction is sought, the general rule that "popular or received
import of words furnishes the general rule for the interpretation of
public laws," Maillard v. Lawrence, 16 How. 251, 261, is applicable.
By those standards the claimed deduction falls for two reasons. In the
first place, the payments in question do not meet the test enunciated in
Kornhauser v. United States, 276 U.S. 145, since they proximately result
not from the taxpayer's business but from the business of the du Pont
Company. The original transactions had their origin in an effort by that
company to increase the efficiency of its management by selling its stock
to certain of its key executives. The respondent undertook to furnish the
necessary stock only after the company had been advised that it could not
legally do so. In that posture of the case these payments are no more
deductible than were the payments made by the stockholder in Burnet v.
Clark, supra, as a result of his endorsements of the obligations of his
corporation. Those payments were disallowed as deductions from his gross
income though they arose out of transactions which were intended to
preserve his investment in the corporation. Similar payments were
disallowed in Dalton v. Bowers, 287 U.S. 404. Hence, the fact that the
transaction out of which the carrying charges here in question arose might
benefit respondent does not bring it within the ambit of his alleged
business of conserving and enhancing his estate. The well established
decisions of this Court do not permit any such blending of the
corporation's business with the business of its stockholders. Accordingly,
the payments made under the 1919 agreement would certainly not be
deductible. And the fact that a new and different arrangement was made in
1929 with the Delaware Company does not alter the conclusion, for it is
the origin of the liability out of which the expense accrues which is
material. Otherwise carrying charges on any short sale whether or not
related to the business of the taxpayer would be allowable as deductible
expenses. That cannot be if the notion of proximate result implicit in the
statutory words "expenses paid or incurred . . . in carrying on any
trade of business" is to have any vitality. In the second place,
these payments were not "ordinary" ones for the conduct of the
kind of business in which, we assume arguendo, respondent was engaged. The
District Court held that they were "beyond the norm of general and
accepted business practice" and were in fact "so extraordinary
as to occur in the lives of ordinary business men not at all" and in
the life of the respondent "but once." n8 Certainly there are no
norms of conduct to which we have been referred or of which we are
cognizant which would bring these payments within the meaning of ordinary
expenses for conserving and enhancing an estate. We do not doubt the
correctness of the District Court's finding that respondent embarked on
this program to the end that his beneficial stock ownership in the du Pont
Company might be conserved and enhanced. But that does not make the cost
to him an "ordinary" expense within the meaning of the Act.
Ordinary has the connotation of normal, usual, or customary. To be sure,
an expense may be ordinary though it happen but once in the taxpayer's
lifetime. Cf. Kornhauser v. United States, supra. Yet the transaction
which gives rise to it must be of common or frequent occurrence in the
type of business involved. Welch v. Helvering, supra, 114. Hence, the fact
that a particular expense would be an ordinary or common one in the course
of one business and so deductible under @ 23 (a) does not necessarily make
it such in connection with another business. Thus, it has been held that
one who was an active trader in securities might take as deductions
carrying charges on short sales since selling short was common in that
business. n9 But the carrying charges on respondent's short sale in this
case cannot be accorded the same privilege under @ 23 (a). The record does
not show that respondent was in the business of trading in securities. Nor
does it show that a stockholder engaged in conserving and enhancing his
estate ordinarily makes short sales or similarly assists his corporation
in financing stock purchase plans for the benefit of its executives. As
stated in Welch v. Helvering, supra, pp. 113-114: ". . . What is
ordinary, though there must always be a strain of constancy within it, is
none the less a variable affected by time and place and
circumstance." One of the extremely relevant circumstances is the
nature and scope of the particular business out of which the expense in
question accrued. The fact that an obligation to pay has arisen is not
sufficient. It is the kind of transaction out of which the obligation
arose and its normalcy in the particular business which are crucial and
controlling.
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n8 22 F.Supp. 589, 597.
n9 Dart v. Commissioner, 74 F.2d 845. Cf. Terbell v.
Commissioner, 29 B. T. A. 44, aff'd 71 F.2d 1017, where such carrying
charges were disallowed as deductions. The Board of Tax Appeals said, p.
45, "We have only the stipulated facts and there is no suggestion in
those facts that the decedent was engaged in the business of making short
sales or in dealing in securities generally."
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Review of the many decided cases is of little aid
since each turns on its special facts. But the principle is clear. And on
application of that principle to these facts, it seems evident that the
payments in question cannot be placed in the category of those items of
expense which a conservator of an estate, a custodian of a portfolio, a
supervisor of a group of investments, a manager of wide financial and
business interests, or a substantial stockholder in a corporation engaged
in conserving and enhancing his estate would ordinarily incur. We cannot
assume that they are embraced within the normal overhead or operating
costs of such activities. There is no evidence that stockholders or
investors, in furtherance of enhancing and conserving their estates,
ordinarily or frequently lend such assistance to employee stock purchase
plans of their corporations. And in absence of such evidence there is no
basis for an assumption, in experience or common knowledge, that these
payments are to be placed in the same category as typically ordinary
expenses of such activities, e. g., rental of safe deposit boxes, cost of
investment counsel or of investment services, salaries of secretaries and
the like. Rather these payments seem to us to represent most extraordinary
expenses for that type of activity. Therefore, the claim for deduction
falls, as did the claim of an officer of a corporation who paid its debts
to strengthen his own standing and credit. Welch v. Helvering, supra. And
the fact that the payments might have been necessary in the sense that
consummation of the transaction with the Delaware Company was beneficial
to respondent's estate is of no aid. For Congress has not decreed that all
necessary expenses may be deducted. Though plainly necessary they cannot
be allowed unless they are also ordinary. Welch v. Helvering, supra. We
conclude then on this phase of the case that as the District Court, on a
correct interpretation of the Act, found that these payments did not
proximately result from, and were not ordinary expenses for the conduct
of, respondent's alleged business, it was error for the Circuit Court of
Appeals to reverse the judgment for petitioners. McCaughn v. Real Estate
Land Title & Trust Co., 297 U.S. 606. There remains respondent's
contention that these payments are deductible under @ 23 (b) as
"interest paid or accrued . . . on indebtedness." Clearly
respondent owed an obligation to the Delaware Company. But although an
indebtedness is an obligation, an obligation is not necessarily an
"indebtedness" within the meaning of @ 23 (b). Nor are all
carrying charges "interest." In Old Colony R. Co. v.
Commissioner, 284 U.S. 552, this Court had before it the meaning of the
word "interest" as used in the comparable provision of the 1921
Act (42 Stat. 227). It said, p. 560, ". . . as respects 'interest,'
the usual import of the term is the amount which one has contracted to pay
for the use of borrowed money." It there rejected the contention that
it meant "effective interest" within the theory of accounting or
that "Congress used the word having in mind any concept other than
the usual, ordinary and everyday meaning of the term." p. 561. It
refused to assume that the Congress used the term with reference to
"some esoteric concept derived from subtle and theoretic
analysis." p. 561. We likewise refuse to make that assumption here.
It is not enough, as urged by respondent, that "interest" or
"indebtedness" in their original classical context may have
permitted this broader meaning. n10 We are dealing with the context of a
revenue act and words which have today a well-known meaning. In the
business world "interest on indebtedness" means compensation for
the use or forbearance of money. n11 In absence of clear evidence to the
contrary, we assume that Congress has used these words in that sense. In
sum, we cannot sacrifice the "plain, obvious and rational
meaning" of the statute even for "the exigency of a hard
case." See Lynch v. Alworth-Stephens Co., 267 U.S. 364, 370.
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n10 Respondent refers to the mutuum in Roman Law.
Ledlie's Sohm's Institutes of Roman Law (2d Ed.), p. 395; Hare, The Law of
Contracts, p. 73.
n11 This makes irrelevant other lines of authority
cited by respondent where "interest" in a different context has
been used to describe damages or compensation for the detention or use of
money or of property. See United States v. North Carolina, 136 U.S. 211,
216; N. Y. General Business Law, @ 370, which provides, "The rate of
interest upon the loan or forbearance of any money, goods, or things, in
action . . . shall be six dollars upon one hundred dollars, for one year,
. . ."
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Petitioners throughout have referred to these payments
by respondent as being capital in nature. Cf. Bonwit Teller & Co. v.
Commissioner, 53 F.2d 381; Hutton v. Commissioner, 39 F.2d 459; Bing v.
Helvering, 76 F.2d 941. What appropriate treatment may be accorded these
items of cost under other provisions of the Act we do not undertake to
say, as that issue is not here.
The judgment of the Circuit Court of Appeals is
reversed and that of the District Court is affirmed.
Reversed.
CONCURBY: FRANKFURTER
CONCUR: MR. JUSTICE FRANKFURTER, concurring.
What the activities of a taxpayer are is an issue for
determination by triers of fact. Whether such activities constitute a
"trade or business" as conceived by @ 23 (a) of the Revenue Act
of 1928 (45 Stat. 791, 799), is open for determination here unfettered by
findings and rulings below except for the weight of the intrinsic
authority of all lower court opinions. To avail of the deductions allowed
by @ 23 (a), it is not enough to incur expenses in the active concern over
one's own financial interest. ". . . carrying on any trade or
business," within the contemplation of @ 23 (a), involves holding
one's self out to others as engaged in the selling of goods or services.
This the taxpayer did not do. Expenses for transactions not connected with
trade or business, such as an expense for handling personal investments,
are not deductible. It is otherwise with losses. @ 23 (e) (2). Without
elaborating the reasons for this construction and not unmindful of
opposing considerations, including appropriate regard for administrative
practice, I prefer to make the conclusion explicit instead of making the
hypothetical, litigation-breeding assumption that this taxpayer's
activities, for which expenses were sought to be deducted, did constitute
a "trade or business."
MR. JUSTICE REED joins in these views.
MR. JUSTICE ROBERTS:
I feel constrained to state my views, not because this
case raises any important issue of law which should be settled by this
court; but, on the contrary, because I think it presents a question the
answer to which depends solely upon the facts disclosed by the record.
Decision of the controversy cannot be helpful in the administration of the
Revenue Acts or set any important precedent. I think the writ should not
have been granted and that it now should be dismissed as improvidently
granted. The amount of taxes involved or the insistence of the Government
that the court below erred in its application of the law to the facts are
not adequate reasons for review. There is no dispute as to principle and
no conflict with any case in the application of any principle.
The function of this court is to resolve conflicts of
decision and to settle important principles of law. The discretionary
power of this court to review judgments of lower federal courts was not
intended to be exercised in every case where those courts have adjudicated
the conflicting claims of the parties, which involves no important
principle of law and no conflict of decision amongst the federal courts.
Our rules adopted to carry out the policy of the statutes granting the
power to bring cases here by certiorari have apprised the Bar and the
public that we will not take cases fully heard and adjudicated below for
the mere purpose of reexamining the correctness of the result. (See Rule
38, par. 5.)
The dominant purpose evidenced by the income tax
statutes is to tax net income. The policy is to credit against gross
income the expenses of the business which begets earnings. The taxpayer is
entitled to deduct that which he reasonably and in good faith expended in
the effort to realize a profit. The revenue acts have always characterized
deductible expenses as the ordinary and necessary expenses of the
business, incurred and paid during the taxable year. The opinion assumes
that the expenditure here in question was necessary in the conduct of the
taxpayer's business but holds that it was not an ordinary expense of that
business. Obviously what is an ordinary expense of a given business must
depend upon the nature and scope of the business, the nature and occasion
of the expenditure, and other considerations which will emerge in each
specific case. Necessarily the decision of one case will have slight, if
any, bearing upon the proper decision of another. If this court is to take
under review every dispute in which the Government and a taxpayer differ
as to whether a given expenditure is an ordinary or an extraordinary
expense of the taxpayer's business we shall be involved in the decision of
myriad cases, each turning upon its own facts, without furnishing any
light to the taxpayers for their future guidance. I think this is the
result of the court's opinion. It is admitted that the fact that the
expenditure occurred but once in the taxpayer's experience does not render
it extraordinary. It must be admitted that the fact that it is a large
transaction does not render it extraordinary. What the opinion does, in
the upshot, is to canvass all the circumstances and reach, as I think, a
conclusion based solely upon the peculiar facts of this single case. We
have repeatedly warned the Bar and the public that this we will not do
because we do not sit for any such purpose.
An added reason for refusing to decide the case is the
admission that the Treasury and the Board of Tax Appeals in years past
have held a similar expense incurred in earlier years an expense of the
taxpayer's business. In a matter resting so much in judgment and
discretion as the determination of what is ordinary and what extraordinary
expenditure in a business the weight of a continued administrative
construction is of peculiar importance; and we ought not now depart from
the rule long observed that such practice is entitled to high
consideration at the hands of the courts and should not be overturned
unless clearly wrong and for the most cogent reasons.
Since the case has been taken and considered on the
merits I think the judgment below should be affirmed. I need add little to
the opinion of Judge Maris of the Circuit Court of Appeals, with which I
agree. The taxpayer borrowed stock in order to sell it for cash to others.
His contract obligated him either to return the stock or to pay the
carrying charges to the lender. What he paid was not technically interest
but it was an expense necessary to his obtaining and using the stock. He
had several alternatives: to pay the annual carrying charges, or to
default, and, in that case, to go into the market to buy the stock and
return it to the lender or to pay the lender the value thereof.
What was there extraordinary about this transaction as
compared with the borrowing of any commodity other than stock for a
business reason and with a business purpose? In the conduct of every
business situations arise which must be met. The circumstance that such a
situation had not theretofore arisen, or that the transaction was the
first of its kind in the respondent's business experience, does not render
it extraordinary in the sense in which the statute uses the term. The
limitation placed by Congress upon the types of expenditures made
deductible was intended to prevent evasion of payment of tax on true net
income, which confessedly was not a motive in the present instance. I
think that under the guise of enforcing the plain mandate of the statute
the court is really reading into the law what is not there and what
Congress did not intend to place there.
To suggest, even by indirection, that perchance the
taxpayer's expenditure may be treated as a capital expenditure is, in my
judgment, to keep the word of promise to the ear and break it to the hope.
In my view the carrying charge of the taxpayer's loan was either an
ordinary expense of his business or it was nothing of consequence under
any provision of the statute.
MR. JUSTICE McREYNOLDS joins in this opinion.
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