Court Opinion

ID: 4593398
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:10:41.366549+00
Date Added: 2024-06-11T07:51:02.946279
License: Public Domain

H. R. KETCHAM, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Ketcham v. CommissionerDocket No. 14531.United States Board of Tax Appeals9 B.T.A. 1208; 1928 BTA LEXIS 4281; January 12, 1928, Promulgated *4281  A certain amount distributed as Christmas bonuses to employees allowed as a business expense.  Claude Collard, C.P.A., for the petitioner.  T. M. Mather, Esq., for the respondent.  MILLIKEN This proceeding results from the determination by respondent of deficiencies in income taxes for the years 1920 and 1921, in the respective amounts of $12,959.33 and $1,434.44.  The errors insisted upon by counsel for petitioner at the hearing of this cause were: (1) Failure of the respondent to allow as a deduction from gross income for the years 1920 and 1921 adequate amounts of depreciation and obsolescence sustained in relation to certain hotel property; (2) the failure of the respondent to allow as a deduction from gross income for the year 1920, salary bonuses paid in the amount of $1,000; (3) the respondent erroneously increased gross income for the year 1920 in the sum of $1,463.98, the said sum representing a reserve for taxes.  The deficiency for the year 1921 was stipulated to be $729.77.  The parties stipulated that petitioner is entitled, for the year 1920, to an allowance for depreciation in the amount of $16,747.91 instead of $14,628.32 as allowed by*4282  respondent.  It was also stipulated that the respondent was in error in increasing income for the year 1920 by sum of $1,463.98, and same should be excluded from income for year 1920.  FINDINGS OF FACT.  Petitioner is an individual, resident citizen of the United States with principal offices at Tulsa, Okla.  The Commissioner of Internal Revenue refused to allow as a deduction from gross income for the year 1920, Christmas salary bonuses in any amount whatsoever.  During the year 1920, petitioner distributed to his employees, persons who were employed in his hotel, $1,000 as Christmas bonuses.  OPINION.  MILLIKEN: Under the facts as admitted in answer filed by respondent and as stipulated, we are of the opinion that the amount of $1,000 distributed by petitioner in the year 1920 to his employees as Christmas bonuses is a proper item of deduction as a business expense for that year.  See ; ; and *4283 . Judgment will be entered on 15 days' notice, under Rule 50.