Hort v. Commissioner

Hort (plaintiff) inherited an office building whose ground floor was leased to Irving Trust under a fifteen-year lease at $25,000 annually; when Irving decided to close that branch in 1933, Hort agreed to cancel the lease for a $140,000 lump-sum payment. Hort did not report the payment as 1933 income, instead claiming a roughly $21,500 loss representing the gap between the payment and the lease's full remaining value, but the Commissioner (defendant) included the full $140,000 in his gross income and disallowed the claimed loss.