Norwich bulletin., 1922-07-14
MUST RETURN INCOME
TAX TO PLANT ESTATE

TAX TO PLANT ESTATE Hs. Ordered by the United States district court to remit to the estate, of the late Morton F. Plant, New London nulti-nail- ,ionaire, the income tax on approximate ly $414,0o0 upon which deductions were disalloweds in 1916 by the then internal revenue collector, James J. Walsh. offi- cials of the revenue officer were engaged yesterday in an effort to detrenain the correct amount to be returned
 When this figure is computed to the satisfaction of the estate and the reve- nue office, it will be incorporated in decree for the estate ordered by Judge 1 Thomas.
 Losses of s214.112.7s incurred by MT. Plant in 1913 and 1914 in the operation of high grade farm with thorough bred cattle were allowed by Judge Thomas as properly deductible from the
 owners income tax return The re- mainder of the amount in dispute was made by the corporate dividends and 1 interest.
 Collector Walsh refused to allow any deductions by MT. Plant on account of his enormous farm losses, on the ground that he was engaged in farming merely Tor pleasure, and not as business, MT. Plant had been engaged in farming l since 1905 or 1905. He kept increas- ling the size of his farm until 1912 1 it numbered several hundred acres, He ] had not made any profit on his farm
 prior to or during 1914, but in 191z he formed an organization of experts for the purpose of putting the farm on a business basis, and installed an elabor. ate, accounting system under the super.
 vision of comptroller. Large quahtitie: I of farm produce were marketed at ore vainng prices and every effort wa ll made, according to the evidence submit l ted to the court, to establish the farns lreputation as high class moder1
 farm.
 | MT. Plant gave good deal of hi
 time to bringing about efficiency and to
 ward putting the farm on a payin;
 basis Notwithstanding these efforts tn
 operation of the place resulted in a los Gl for 1913 of $107, ,680.70 or about 200 De
 cent. of the receipts, and in 1914 Q I $106, ,4ajts98. including depreciation, oi
 about 150s per cent. of tht receipts. I Collector walsh took the position tha { the great excess of exenses over receipt l proved that farming was a pleasure o
 hobby with MT. Plant and not sourc
 of profit and that his farm was not con ducted on commercial basis,' an therefore that the expense of conductin !, |
 but personal expense and not deducti ble.
 Ii The court considered that the evidenc had established clearly that Mir Plant farm was conducted as a busintss enter ( prise and with the expectation. that would eventually become profitable The mere fact that 8 heavy loss was in , I.curfed in the initial status of so larg
 an enterprise does not necessarily sho' the contrary The court added tha 7 "even though 1t Is not SO, do not be fieve that farming when engaged in a a regular occupation and in accordanc | 1 with recognized business principles an practices, is any the less a bushes : twithin the meaning of the state becaus : lthe person engaging it Is willing to q so without regard to it's profitablenes l because of the pleasure derived from it. The income taxes in dispute wer 2 assessed in 1916 for the years 1913 an [ 1914 and paid under protest to avoi 1. penalties. Before the case was read for trial, MT. Plant died and the execr : Etors of his estate were substituted a ! plaintiffs Edward M. Day of New Hs Iven and George l.. Shearer of New Tor
 | city represented the estate. while th
 district attorneys office represented th . revenue office.
 t In addition to the farm losses elaine < as deductfble was one of s60,45561 rer 5 resenting corporate dividends declare ! prior to March 1. 1913, and payable sui : sequent to that date. to stockholders { record at dates prior to that time ar Q other of s95,S20, representing interes s Isdue March l.. 1913, on certain corpora; bonds and third of $45,7ls.ls aIlege