Hill v. Commissioner

1966 T.C. Memo. 35, 25 T.C.M. 213, 1966 Tax Ct. Memo LEXIS 244

• Court: United States Tax Court
• Decided: February 23, 1966
• Docket: Docket No. 5690-64.
• Status: Unpublished

Opinion

Robert C. Hill and Martha S. Hill v. Commissioner.

Hill v. Commissioner

Docket No. 5690-64.

United States Tax Court

T.C. Memo 1966-35; 1966 Tax Ct. Memo LEXIS 244; 25 T.C.M. (CCH) 213; T.C.M. (RIA) 66035;

February 23, 1966

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Charles J. Chastang, 33 N. High St., Columbus, Ohio, for the petitioners. W. Dean Short, for the respondent.

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MULRONEY

Memorandum Opinion

MULRONEY, Judge: Respondent determined a deficiency in petitioners' 1960 income tax in the amount of $600. ¹ Robert C. Hill, who will be called petitioner, is an osteopathic physician who lives in Cincinnati, Ohio. He and his wife Martha filed their joint income tax return for 1960 with the district director of internal revenue at Cincinnati, Ohio. Petitioner is in the same position as the taxpayer in Glenn L. Heigerick, 45 T.C. 475, (Feb. 23, 1966), in that he was an osteopath who had agreed to pay $3,000 for staff privileges as a general practitioner at the Epp Memorial Hospital. He paid $2,000 of said amount in the year 1960 and took a deduction for said payment, which respondent disallowed.

Petitioner contends the payment was deductible as a business expense under section 162(a), Internal Revenue Code of 1954. The payment secured staff privileges for an indefinite period of time and it was in effect petitioner's testimony that he anticipated his reappointment each year and he has been reappointed and is still a member of the staff.

Since the payment was made under the same circumstances as the payment that was disallowed in Glenn L. Heigerick, supra, our opinion there will control here. Accordingly, consistent with our opinion in the above cited case, we hold the $2,000 payment in 1960 admittedly for staff privilege fees was not an allowable business expense deduction under section 162(a), Internal Revenue Code of 1954.

Here, as in Glenn L. Heigerick, supra, respondent allowed an amortized deduction for said payment based on treating the payment as a capital expenditure.

Decision will be entered for the respondent.

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Footnotes

• 1. The same notice of deficiency determined a deficiency for 1961 which is not in dispute.