Court Opinion

ID: 4608755
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:43:19.690479+00
Date Added: 2024-06-11T07:53:45.280867
License: Public Domain

JOHN S. HALL AND JAMES GARFIELD, EXECUTORS, ESTATE OF CHAS. F. CHOATE, JR., PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Hall v. CommissionerDocket No. 13552.United States Board of Tax Appeals16 B.T.A. 71; 1929 BTA LEXIS 2651; April 18, 1929, Promulgated *2651  LOSS - DAMAGE BY STORM. - The extent of the loss sustained by petitioners' decedent in 1921 by reason of damage to his country estate from a violent ice storm determined, and the amount so found held to be subject to deduction from gross income of such decedent for that year under section 214(a)(6) of the Revenue Act of 1921.  James Garfield, Esq., for the petitioners.  L. L. Hight, Esq., for the respondent.  TRUSSELL *71  This proceeding is upon a deficiency in income tax of $9,629.32 for the calendar year 1921, asserted against Charles F. Choate, Jr., deceased.  Only one error is assigned - the disallowance by respondent of a deduction of $15,000, made from gross income by the taxpayer, as a loss resulting from damage sustained to his country estate by storm during the taxable year in question.  FINDINGS OF FACT.  Petitioners are the duly appointed executors of the estate of Charles F. Choate, Jr., formerly of Southborough, Mass., and who died November 30, 1927.  During the taxable year 1921 the said Charles F. Choate, Jr., was the owner of a country estate of Southborough, Mass., which he had acquired in 1911.  This property when first*2652  acquired had no buildings upon it, but was improved with many exceptionally fine ornamental and fruit trees, some of natural growth and others which had been set out many years prior to that time and had reached an advanced state of growth and beauty.  On acquiring the property the taxpayer in 1911 erected upon it, on a high point of ground where there were many trees so disposed as to give an especially pleasing and attractive outlook from each side, a large, handsome house, stables and other out buildings and further improved the estate by the planting of additional fruit and ornamental trees.  In 1914 the taxpayer purchased an adjoining tract of land for $6,000, *72  and included it in the estate which from that time forward by that addition comprised a total of 26 acres, and this was carefully tended at all times up to the taxable year 1921 in question.  On November 29, 1921, there occurred a very severe ice storm over the territory in the vicinity of the taxpayer's estate.  Rain had fallen for some hours and froze as it fell causing the trees and shrubbery to be coated with ice, this coating becoming thicker until by that night the limbs began to break and fall.  In some*2653  places this coating was several inches in thickness.  All during the night of November 29 the breaking of the branches continued and by morning an enormous amount of damage had been done.  On the taxpayer's estate all of the trees and shrubs, with the exception of a few in sheltered locations, had been broken, some of them destroyed, and many so injured that their symmetry was permanently marred and their life and vigor decreased.  These trees and shrubbery constituted a very material part of the fair market value of the estate as a whole.  The value of this taxpayer's estate when completed prior to 1913 remained the same, with the exception of the addition of $6,000 in 1914 through the acquisition in that year of the additional tract of land, until the date of the storm in question.  Immediately after that storm the fair market value of this estate was $15,000 less than it was immediately prior to such storm, and this decrease in value came as a result of the damage occasioned to the trees and shrubbery thereon by the storm.  OPINION.  TRUSSELL: By section 214(a)(6) of the Revenue Act of 1921 it is provided that in computing net income there shall be allowed as deductions: *2654  (6) Losses sustained during the taxable year of property not connected with trade or business * * * if arising from fires, storm, shipwreck or other casualty or from theft, if not compensated for by insurance or otherwise.  * * * In case of losses arising from destruction of or damage to property, where the property so destroyed or damaged was acquired before March 1, 1913, the deduction shall be computed upon the basis of its fair price or value as of March 1, 1913.  Petitioners have appealed from respondent's disallowance of a deduction from gross income taken by decedent of $15,000 for the taxable year 1921 as damage sustained in that year to his country estate, as a result of an ice storm.  The question we have here is one of fact, the extent of the loss in value of the estate due to the damage sustained.  ; . Upon this question the evidence introduced by the petitioners is convincing.  The record shows by the testimony of competent witnesses *73  that the damage done was very extensive, that the estate was a very valuable one, worth in excess of $150,000, and*2655  that a large portion of its value lay in the beauty and perfection of its ornamental trees and shrubbery.  These witnesses compute the damage at $15,000, as the difference between the reasonable sale value of the place immediately before and after the storm, there being no change in the market, and such decrease being due wholly to the damage done.  This testimony is clear, reasonable, and well sustained, and no evidence was introduced by respondent contradicting it in any respect and we accept these facts as sufficiently proven.  The estate of this taxpayer should be allowed a deduction of $15,000 from his gross income for the calendar year 1921 as a loss occasioned by storm and not compensated for by insurance or otherwise.  Judgment will be entered pursuant to Rule 50.