Heifetz v. Commissioner , 15 B.T.A. 410 ( 1929 )

OPINION.

Green:

Under the Revenue Acts of 1918, 1921, and 1924 [sec. 214(a) (1)], a taxpayer, in the computation of his net income, is permitted to deduct “ a reasonable allowance for salaries or other compensation for personal services actually rendered.” It is conceded that the amounts which the petitioner seeks to deduct were actually paid and there is but little dispute as to the nature of the services rendered. The petitioner contends that the services were worth the amounts paid and the respondent contends that they were of little value and that the payments were in fact gifts.

The petitioner’s career as a concert violinist in America began in 1917, at which time he was 17 years of age. His success is a matter of common knowledge, the practical evidence of which is to be found in his gross income. It is clear that, except for such services as were rendered by the private secretary, the petitioner’s father and mother guided and instructed him and managed his affairs until he employed a manager in the fall of 1923, and that they were constantly in touch with all his affairs and assisted and aided him during the remainder of that year and the succeeding one. It is natural that as the petitioner grew older and more experienced he should take over the management of his own affairs and that his need for professional supervision and instruction should become less.

It is necessary for us to put a value on the services rendered to the end that the petitioner be permitted to deduct the “ reasonable allowance ” prescribed in the statutes. After a careful consideration of all of the evidence, we have determined that the petitioner should be allowed to deduct the following amounts for the services rendered in the various years:

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Judgment will be entered under Bule 50.