Court Opinion

ID: 6912025
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:26:21.944299+00
Date Added: 2024-06-11T16:06:32.336037
License: Public Domain

JAMES ALGER FEE, Circuit Judge
(concurring).
The majority opinion is correct and sound. However, clarification may assist.
The statute provides that there should be allowed as deductions “rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity.” Section 23(a) (1) (A), Internal Revenue Code. Unless taxpayers here had made a transfer of their entire equity, no deduction would be allowable under this section. The deed to their daughter did not convey the fee because they did not own the fee. After the transfer of some interest to their daughter, taxpayers, not their daughter or her guardian, were bound to pay the balance of the purchase price and were still the owners of an equity in the parcel until this was paid. If there had been a default, they would have been the defendants, since they were in possession and were the vendees. After the purchase price had been paid in full, title to the parcel was taken in .taxpayers’ names.
Taxpayers are not entitled to the deduction claimed here, since they have failed to show that the payments were made for the use of “property to which the taxpayer has not taken or is not taking title or in which he has no equity.” Besides, the payments of the so-called “rental” were not and could not have been made to the daughter or her guardian under the circumstances “as a condition to the continued use or possession” of the property.