Court Opinion

ID: 4601531
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:27:48.314923+00
Date Added: 2024-06-11T07:52:30.570714
License: Public Domain

GEORGE DE FOREST BRUSH, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Brush v. CommissionerDocket No. 6568.United States Board of Tax Appeals9 B.T.A. 171; 1927 BTA LEXIS 2654; November 18, 1927, Promulgated *2654  March 1, 1913, value of certain paintings determined.  F. Mores Hubbard, Esq., for the petitioner.  W. F. Gibbs, Esq., for the respondent.  SIEFKIN*171  This is a proceeding for the redetermination of deficiencies in income taxes for the years 1919, 1920, and 1921 in the respective amounts of $3,401.60, $1,371.81, and $3.70.  The deficiencies resulted from the refusal of the respondent to place any value as of March 1, 1913, on certain paintings and a statue, all of which were the work of *172  the petitioner, and the treatment by respondent of the entire amounts received by petitioner on the sale of such paintings and statue in the years in question as taxable income.  Certain of the facts were stipulated, and in addition, petitioner called two experts as witnesses who gave opinion evidence as to the March 1, 1913, value of the paintings.  FINDINGS OF FACT.  George De Forest Brush, the petitioner, is an artist by profession, having devoted his time exclusively to the pursuit of this profession for over 50 years.  During the years 1919, 1920, and 1921 he sold certain works of art which had been produced by him.  The names of the*2655  works of art in question and the circumstances in connection therewith were as follows: (1) "Portrait of Mrs. Pearmain." This portrait was sold in 1919 for $8,000 and the net amount received by the taxpayer after deducting commission was $6,800.  All the work and labor on this portrait had been completed by Brush prior to March 1, 1913, that is to say, about two years before the beginning of the European war in 1914.  Brush and his wife went to Europe in the fall of 1913 and the "Portrait of Mrs. Pearmain" had been completed by him about one year prior thereto.  (2) "Head of a Child." This portrait was sold in 1919 for $3,500 and the net amount received by Brush after deducting commission was $2,975.  All the work and labor on this portrait was completed by him before March 1, 1913.  The model for this portrait was his daughter, tribbie, and the portrait was made when she was about two or three years old.  She was born in 1891 and died at the age of twenty-four in or about the year 1915.  (3) "Mother and Child." This portrait was sold in 1919 for $10,000, which was the net amount received by Brush.  The work on this portrait was begun at about the same time as the "Head of a*2656  Child" referred to above, that is, about 35 years ago.  At that time the whole picture was sketched out, including the design and some of the color, and the composition was completed.  This work represented about seven-eighths of the entire work on the picture.  The balance consisted of touching up, adding some colors and painting some little flowers on the dress, which was done after 1913 shortly prior to the time when the portrait was sold.  (4) A Statue.  The statue was sold in 1919 for $960, which was the net amount received by Brush.  The statue was begun about 1890 and 1891 shortly before the birth of Brush's daughter, Tribbie, and the following summer Brush went to Paris, taking the statue with *173  him.  He continued the work on it there, practically completing it at that time, having performed not less than nine-tenths of the work thereon.  The only work done on the statute after March 1, 1913, was a slight retouching, consisting in a change in the drapery and putting sandals on the feet.  (5) "By the Fountain." This portrait was sold in 1920 for $18,000.  The net amount received by Brush, after deducting commission, was $15,255.  Brush began the work on this portrait*2657  about 20 years ago.  His wife posed for the picture, holding in her arms their youngest daughter, Thea, who was then a little over a year old, and who is now 21 or 22 years old.  At that time, Brush finished all, the composition, consisting of the planning, sketching, etc., and the portrait as thus finished at that time constituted a complete picture.  The only change made later on (subsequent to March 1, 1913) was the insertion of two additional figures (two children) and a change in the background.  (6) "Sculptor and the King." This portrait was sold in 1921, and the net price received therefor by Brush was $3,825.  Brush did practically all the work on this portrait several years before the beginning of the war in 1914 and then put it aside and did no more work upon it for a number of years.  At about the time of the beginning of the war, or shortly thereafter, Brush retouched this portrait merely by going over it with a wash of transparent oil, making, however, no change in the portrait itself.  The fair market value of the "Portrait of Mrs. Pearmain" on March 1, 1913, was $12,000; of "Head of a Child" on the same date was $3,500; of "Mother and Child" on the same date was*2658  $12,000; of "By the Fountain" on the same date was $12,000; of "Sculptor and the King" on the same date was $4,500.  OPINION.  SIEFKIN: Petitioner is an artist who has ranked as one of the foremost American painters since 1895 and enjoyed that rank in 1913.  The objects giving rise to the deficiencies here involved are various paintings and a statue which are the work of his hands.  Two art dealers, qualifying as experts, testified to the market value of his work and gave their opinion as to the value of March 1, 1913, of the paintings.  We have adopted these values, since, so far as the record shows, there is nothing detracting in any way from their testimony, and we do not feel justified in substituting a different value than that shown by this evidence.  The finding of these values then leaves as the only question, whether petitioner realized a gain taxable as income on the sale of these paintings in the years in question.  The respondent treats the question in his brief as though petitioner were *174  seeking to deduct a loss.  Petitioner, however, in his brief merely contends that no taxable gain resulted with respect to any of the paintings, except "By the Fountain. *2659  " As to that painting, the net amount received by petitioner being $15,255, and the March 1, 1913, value being $12,000, the taxable gain is fixed at $3,255.  Considering the question to be merely one as to whether a taxable gain resulted, taken in connection with the uncontradicted fact that the paintings were the work of the petitioner, we may safely assume that the cost was less than the March 1, 1913, values as herein found.  We are unable to see any reason why petitioner is not entitled to a valuation as of March 1, 1913, the same as any taxpayer who disposes of more prosaic objects.  With respect to the gain derived upon the sale of the statue in the amount of $960, there was no evidence introduced as to March 1, 1913, value, and in that respect, we approve the respondent's determination of the entire amount as income.  In other respects, the respondent was in error.  Reviewed by the Board.  Judgment will be entered on 15 days' notice, under Rule 50.