Gallagher v. Commissioner

2 B.T.A. 1057, 1925 BTA LEXIS 2169

• Court: United States Board of Tax Appeals
• Decided: October 28, 1925
• Docket: Docket No. 1541.
• Status: Published

Opinion

The taxpayer appeals from the determination of a deficiency of $586.71 in income tax for the calendar year 1919.

FINBINGS OF FACT.

1. The taxpayer is an individual residing at Oakland, Calif.

2. Some time prior to 1919 the taxpayer and his seven brothers and sisters inherited from their parents an estate consisting of a large orchard. The estate was not divided but, for a number of years, and during 1919, was held by the eight brothers and sisters as tenants in common. The actual operation of the orchard was conducted by a superintendent, Alfred Gallagher, who was one of the brothers and who was paid compensation therefor.

3. A distribution of profits is made on March 1 of each year by the superintendent to each of the brothers and sisters and their heirs.

4. The total profits resulting from the operation of the property in the year 1919 amounted to $79,719.88, of which amount $8,000 was actually distributed to the taxpayer and reported by him in his income-tax return for 1919. The Commissioner increased the taxpayer’s income from this property from $8,000 to $9,964.99, the latter amount representing one-eighth of the total profits resulting from the operation of the property.

5. The taxpayer filed his income-tax return for 1919 on a cash receipts and disbursements basis.

DECISION.

The determination of the Commissioner is approved.