Weiss v. Commissioner

7 B.T.A. 615, 1927 BTA LEXIS 3144

Opinions

OPINION.

Phillips :

It is stipulated that certain transactions took place between the petitioner and the Weiss-Meyer Co. as shown in his account on the books. On the basis of that stipulation we are asked to determine what income the petitioner received in 1922 from that company.

It appears from the stipulation that there are two bases upon which the petitioner became entitled to receive money from the company during the year involved. He was entitled to receive $5,400 as compensation for services. Another $4,500 he was entitled to receive because of cash paid in to the company by him or on his account. Against this he withdrew $6,500.

The cash credit to his account can only mean that the company has received cash and can not possibly be construed as a receipt of income by the petitioner from the company. One does not derive income from another by the deposit of cash with that other. On the facts stipulated, no more than $5,400 of the amount withdrawn can be considered as income to the petitioner unless we go outside the record to assume that there was either a balance of salary carried over from a previous year or an advance of salary paid in excess of compensation credited. This we are unwilling to do.

Only $2,000 of the amount withdrawn or credited was returned as income by the petitioner. There is nothing in the record from which we may conclude that only this amount was income. The compensation credited amounted to $5,400. During the year he withdrew $6,500 in cash. In the absence of some further showing that the amount withdrawn was not on account of salary and that the relationship of the petitioner to the company was not such that amounts credited could have been withdrawn at any time and were available to him to such an extent as to constitute constructive receipt, wé must hold that the petitioner derived income from the company for salary in 1922 in the amount of $5,400.

Decision will be entered on 10 days’ notice, under Bule 50.