Court Opinion

ID: 7222091
Source: CourtListenerOpinion
Date Created: 2022-07-25 03:50:26.351136+00
Date Added: 2024-06-11T16:17:17.222028
License: Public Domain

GREEN, Judge
(concurring).
I concur in the foregoing opinion and will call attention to some other matters which appear to me to sustain the final conclusion reached therein.
The regulation made by the Department appears to me to be not only unauthorized but illogical. In the case before us, property was willed to trustees with directions to pay the income over to the plaintiff during his lifetime. This income was to be paid currently and the trustees could make no deductions from it except for administrative expenses and in accordance with the will. The trustees who held the legal title were not taxable upon this income because it was not theirs but that of the plaintiff fiduciary. If he cannot take a deduction for depreciation, no one can. Surely such an inequitable result was not intended by Congress and I find nothing in the statute which even inferentially indicates such an intention.
As is said in the foregoing opinion, so far as the right to deductions are concerned there is no difference between depreciation and depletion. Both terms are used in the law in order to cover losses of either nature sustained by the taxpayer and I can see no reason for applying a different rule in cases where there is both a legal life tenant and an equitable life tenant. Obviously, the equities are the same in each case.
It seems to have been considered by the Bureau that because the plaintiff did not have the legal title this fact in some way prevented his getting the benefit of the deduction, but in the quotation made in the majority opinion from Freuler v. Helvering, 291 U.S. 35, 54 S.Ct. 308, 310, 78 L.Ed. 634, the rule is definitely laid down that the fiduciary in computing his income “is authorized to make whatever appropriate deductions other taxpayers are allowed by law.”
What is said by this court in Huber v. United States, 16 F.Supp. 773, 83 Ct.Cl. 643, does not, as pointed out in the majority opinion, sustain defendant’s position. In that case an altogether different situation was presented. Plaintiff received the income producing property for life without the intervention of any trustees. There was no equitable life tenant. Necessarily the income which he received was taxable to him and he was the only one who could claim a deduction. But this does not show that where there is an equitable life tenant who receives the income he cannot be allowed a deduction.