OPINION.
Love:
The notice of deficiency in tax for 1920 was mailed to petitioner on April 9, 1925. The sixtieth day after that date was June 8, 1925. There was no petition filed relating to the year 1920 except the amended petition correcting the irregularity in the petition appealing from determination as to the year 1919, which had been filed March 20, 1925. While this amended petition also covered 1920, it was not filed until after June 8, 1925. It is, therefore, at once apparent that there was not a petition appealing from the determination of deficiency in tax for 1920 filed within sixty days after the mailing of notice of deficiency, and, consequently, the Board has no jurisdiction to redetermine this deficiency. The sixty-day period of limitation is fixed by the statute and the Board has no power to extend it.
The facts show that in 1919 all but two shares of petitioner's capital stock was owned by J. W. Teasdale, Sr., and a son, and that the remaining two shares were held by a brother and another son. These four persons also owned 350 shares of the stock of the Losey Real Estate Co. out of a total of 400 shares outstanding (or 87½; per cent); and of the remaining 50 shares, 17 were held by the wives of the two sons of J. W. Teasdale, Sr., and 33 shares were held in trust for children of one of the sons. There is no question in our minds that these facts meet the test of the statute that two or more corporations shall be deemed affiliated when "substantially all the stock is owned by the same interests."
There is no direct proof of the ownership of the capital stock of the Seneca Dried Fruit Co. It does appear that the members of the Teasdale family controlled this corporation in some manner, but we are not warranted on the vague testimony on this point in making a finding that the ownership or control of the stock was sufficient to deem the corporation affiliated with petitioner. Upon the evidence in the record we can not find that the Seneca Dried Fruit Co. was affiliated with petitioner in 1919.
The petitioner seeks to deduct from income in 1919, $7,765.13 which was charged off in that year as a bad debt. This is a part of the debit balance carried on its books against the Seneca Dried Fruit Co., the total in 1919 being $17,765.13. This total (with the possible exception of $1,400) is the balance of the old indebtedness to the petitioner of the Seneca Dried Fruit Co. which existed in 1912 or 1913. The latter went into bankruptcy at that time, and the fact of worthlessness of the debt must have been known at that time or shortly thereafter, as it was testified that the Traders National Bank could not recover on its debt against the bankrupt and hence sued G. W. Teasdale as guarantor. The only reason given for not charging off this account before 1919 was that the. suit of the Traders National Bank was pending and the total amount of indebtedness of the Seneca Dried Fruit Co. to petitioner could not be known until this suit was concluded. We are unable to see how this would affect the fact of worthlessness of the old debt. It does not appear, in any event, why the petitioner paid the amount of the judgment obtained by the bank against G. W. Teasdale. Our conclusion is that the evidence does not show this debt became worthless within the year 1919.
Judgment will be entered after 20 days' notice, wnder Rule 50.