Court Opinion

ID: 6895981
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:49:46.888197+00
Date Added: 2024-06-11T16:05:59.566376
License: Public Domain

HUTCHESON, Circuit Judge
(dissenting)-
Not at all abandoning his contention that the gross, rather than the net, value of the property should be used in determining the deduction allowed by Internal Revenue Code, Sec. 812(c) taxpayer concedes that the amount of the refund due him was wrongly calculated and that instead of $3,150.55 as awarded below, it should have been $2,398.96. This concession is based on the recognition by the taxpayer that the gross figures should be used on both sides of the equation in determining the amount to be charged to the second estate as received from the former, and the amount to be deducted in the second estate as the value of property previously taxed.
I agree with appellee. Dissenting in Bahr v. Commissioner, 5 Cir., 119 F.2d 371, I pointed out why this must be so. I have to add to what I said there only a reference to the opinion of the Supreme Court in Crane v. Commissioner, 67 S.Ct. 1047, holding that when, for purposes of taxation, taxing statutes speak of the value of property, they refer to the property and not the taxpayer’s equity in it, the value to the taxpayer after mortgages against it are deducted. The fallacy of the majority opinion in Bahr’s case and of the majority opinion here is the same fallacy which was exposed in the Crane case, the fallacy of treating the statute as though it dealt with the taxpayer’s equity in the property rather than the property itself.
It will serve no purpose for me to more fully descant on the reasons why I think the judgment should he affirmed. They are set out in my dissent in Bahr’s case and in the opinion of the Supreme Court in the Crane case. In Bahr’s case the taxpayer, in addition to insisting on the use of the gross estate in determining the deduction allowable under Revenue Act 1926, Sec. 303(a) (2), 26 U.S.C.A.Internal Revenue Acts, page 233, sought to claim as a deduction federal estate taxes due and paid by the predecessor estate. I thought and said in my dissent that this deduction was not allowable. T still think so. Taxpayer here is not seeking the benefit of such a deduction at all. He is merely asking that in determining the deduction allowable under the section, the statute be followed and the value of property used in determining the value of the gross estate of the prior decedent be used in determining the deduction allowable on acount of the previously taxed property of the former estate. Taxpayer’s concession in open court that the amount of his judgment should be reduced from $3,150.55 to $2,398.96 is a sufficient basis for reforming and affirming the judgment here. The judgment should be reformed and affirmed for $2,398.96. I dissent from its reversal.