Case ID: bta_5/html/0313-01.html
Source: Caselaw Access Project
Author: {"author": "Trammell:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Appeal of C. A. Weaver.
    Docket No. 8920.
    Decided October 30, 1926.
    An individual who kept Ms books and filed his returns on the calendar year basis was a member of a partnership which kept its books on the basis of a fiscal year ended in the calendar year 192-1. Held, that he is not entitled to the benefit of the 25 per cent reduction in tax provided in the 1924 Act for the year 1923 with respect to his share of the partnership profits for the fiscal year ended in 1924.
    
      Willis Grane, Esq., for the petitioner.
    
      T. M. Wilkins, Esq., for the Commissioner.
    This is an appeal from the determination of a deficiency in income tax for the calendar year 1924 in the amount of $11,027.01.
    The question presented is whether the taxpayer is entitled to the 25 per cent reduction of his income tax by virtue of sections 1200 and 1201 of the Revenue Act of 1924.
    The facts are not disputed. The Commissioner moved to dismiss the petition upon the ground that it did not state a cause of action.
    FINDINGS OF FACT.
    The taxpayer is a partner in the partnership of C. H. Weaver & Co. The partnership operated and filed its income-tax return upon the fiscal year basis. Its fiscal year ended March 31, 1924. The taxpayer’s share of the profits of the partnership for the fiscal year ended March 31, 1924, attributable to the year 1923, was $79,555.24. This amount was reported in the taxpayer’s return for the calendar year 1924 as taxable at the 1923 rates. The income was shown on the regular printed return Form 1040-FY, -which provided “For calendar year 1924 if income is derived from a partnership or fiduciary computed on the fiscal year basis.”
    This return form provided for separate computation of taxes on income taxable at 1923 rates and provided for a deduction of 25 per cent of such taxes computed at 1923 rates. The total tax on income taxable at 1923 rates, without the deduction of 25 per cent, would be $44,108.08. Twenty-five per cent of this amount is $11,027.01. The tax on income taxable at 1923 rates, less the 25 per cent, would be $33,081.04. The Commissioner disallowed the 25 per cent deduction referred to.
   OPINION.

Trammell:

The decision of the question involved in this appeal is governed by Appeal of Charles Colip, 5 B. T. A. 123.

Judgment will he entered for the Commissioner.