Appeal of Troost Avenue Cemetery Ass'n

4 B.T.A. 1169

• Court: United States Board of Tax Appeals
• Decided: September 29, 1926
• Docket: Docket No. 1114
• Status: Published

Opinion

OPINION.

SteRnhagen :

The Commissioner has disallowed the deduction of the aforesaid amounts of $4,116.33 for 1920, $5,801.93 for 1921, and $6,537.61 for 1922, “ inasmuch as such fund constitutes a reserve to provide for the future expenses of the corporation.” In this we think he was in error. The deposit with the trustee was a present outlay pursuant to an obligation incurred in carrying on its business and forever beyond the recovery or control of the petitioner. The trust was expressly established and, unlike the Appeal of Springdale Cemetery Assn., 3 B. T. A. 223, the commitment was completé and the fund was irrevocably in the possession of another. We think that the full amount received by petitioner from the purchasers of lots was gross income and the percentage of the gross amount paid to the trustee under the trust agreement was deductible as an ordinary and necessary expense. The interest received by the trustee is clearly gross income of the trust and not of the Cemetery Company, which neither received it nor benefited by it.

Judgment for the 'petitioner.