The Commissioner determined a deficiency in income tax for 1950 in the amount of $11,072.78. The question for decision is whether the cancellation of indebtedness by an employee-stockholder in 1950 on account of accrued but unpaid compensation for prior years is deductible by him under section 23 (a) or (e), Internal Revenue Code of 1939, or whether the cancellation represents a contribution to the capital of the employer corporation and therefore is not deductible.
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