Court Opinion

ID: 4614971
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:31:22.044073+00
Date Added: 2024-06-11T07:54:52.565261
License: Public Domain

GEORGE L. SHEARER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Shearer v. CommissionerDocket No. 27044.United States Board of Tax Appeals18 B.T.A. 465; 1929 BTA LEXIS 2039; December 9, 1929, Promulgated *2039  1.  Respondent's method of computing petitioner's normal and surtaxes for the calendar year 1922 held to be correct and in accordance with sections 205(c), 210, 211(a), and 218(a) of the Revenue Act of 1921, where petitioner reported on a calendar year basis and was a member of a partnership which reported on a fiscal year basis.  Theodore Schilling,3 B.T.A. 936, followed.  2.  A tax imposed on sales by manufacturers of automobiles is not deductible by individual purchasers thereof.  R. C. Musser,3 B.T.A. 498, followed.  C. H. Butler, Esq., for the petitioner.  L. A. Luce, Esq., for the respondent.  GREEN *466  In this proceeding, the petitioner seeks a redetermination of its income-tax liability for the calendar year 1922, for which year the respondent has determined a deficiency in the amount of $390.31.  The petitioner alleges that the respondent erred (1) in the method employed in computing the tax on income received from a partnership keeping its books on a fiscal year basis, and (2) in disallowing as a deduction from gross income an amount of $519.75 representing taxes paid on the purchase of automobiles*2040  during the year.  The facts were stipulated.  FINDINGS OF FACT.  The petitioner is an individual and a resident of New York City, with his offices located at 45 Wall Street.  He made and filed his individual income-tax returns on the basis of a calendar year.  The partnership of Stewart & Shearer, of which petitioner is a member, made and filed a partnership return of income on the basis of a fiscal year ended April 30, 1922.  The net income on the return filed by the petitioner, for the calendar year 1922, amounted to $61,632.12, which included an amount of $60,343.43 representing his distributive share of the net income of the partnership of Stewart & Shearer for its fiscal year ended April 30, 1922.  The petitioner's net income and resulting tax liability, as determined by the respondent, is as follows: NET INCOMENet income as disclosed by return$61,632.12As corrected21,331.92Net adjustment40,300.20Additions: Auto tax519.75Deductions:1921 income (Stewart & Shearer) 1$40,228.951921 dividends (Stewart & Shearer) 191.00Loss on sugar (Stewart & Shearer) 1500.00Total40,819.95Net adjustment as above40,300.20COMPUTATION OF TAXTotal net income$21,331.92Income subject to surtax21,331.92Less:Exemption$2,400.00Dividends442.502,842.50Income subject to normal tax18,489.42Tax 4% on $4,000.00$160.00Tax 8% on $14,489.421,159.15Tax 8% on $40,228.95 (1921 income)3,218.32Tax 12 1/2 on capital gain38.10Surtax at 1922 rates546.55Surtax at 1921 rates7,759.17Total tax assessable12,881.29Tax previously assessed12,490.98Additional to be assessed (deficiency)390.31*2041 *467  During the year 1922 the petitioner paid as part of the purchase price of automobiles, the amount of $519.75 as representing a war tax paid to the manufacturers of the automobiles.  The respondent refused to allow the amount paid as a deduction from the petitioner's gross income for that year.  OPINION.  GREEN: The respondent's computation of net income and tax, set forth in the findings of fact, is somewhat confusing.  It becomes clearer with the following explanation: The item "Net income disclosed by the return, $61,632.12," was, by the respondent, divided into two parts.  The item "As corrected, $21,331.92" is that portion of the net income returned which he attributed to partnership income for 1922.  The item "Net adjustment, $40,300.20" is the portion of the net income returned which, with some adjustment that we do not understand, he attributed to partnership income for 1921.  The petitioner's contention with respect to the first issue is the same as that made by , in which case the respondent's determination was approved.  What we said there is controlling here.  Cf. *2042 , and . The second issue must also be decided adversely to the petitioner, on the grounds of our decisions in ; ; ; and . Judgment will be entered under Rule 50.Footnotes1. To be taxed at 1921 rates. ↩