Reynolds v. Commissioner , 17 B.T.A. 693 ( 1929 )

J. E. REYNOLDS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Reynolds v. Commissioner

Docket No. 25575.

United States Board of Tax Appeals

17 B.T.A. 693; 1929 BTA LEXIS 2266;

September 28, 1929, Promulgated

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Two partnerships had fiscal years ending March 31. On September 30, 1922, the partnerships were succeeded by a corporation, the stock of which was issued to the partners. The partners reported their income on a calendar year basis. Held that the accounting period of the partnerships continued until March 31, 1923, and that accordingly the income of the partners from the partnerships for the period April 1, 1922, to September 30, 1922, should be reported in the returns of the partners for the calendar year 1923.

C. M. Pasquier, C.P.A., for the petitioner.

Frank S. Easby-Smith, Esq., for the respondent.

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LITTLETON

This proceeding involves a deficiency in income tax as determined by the Commissioner for the calendar year 1922 in the amount of $2,454.45, and has for its only issue the question of when certain partnership income should be taxed to the petitioner. The facts were stipulated, from which we make the following findings of fact:

FINDINGS OF FACT.

The petitioner is an individual and a resident of Shreveport, La.

The petitioner and C. A. Tooke were equal partners in two partnerships, namely, Haynesville Ice & Cold Storage Co. and Haynesville Light & Power Co., which began business on April 1, 1921. Each of the said partnerships had a fiscal year ending March 31, 1922. On September 30, 1922, both of the partnerships dissolved and their combined business was incorporated in one corporation, the stock of which was issued to the petitioner and C. A. Tooke.

The petitioner reported his income on a calendar year basis. In his return for 1922, he included his distributive shares of the income of the partnerships for the fiscal year ended March 31, 1922, and in his return for 1923, he reported his distributive shares of the income of the partnerships for the period March 31, 1922, to September 30, 1922. Upon the audit of the return for 1922, the Commissioner increased the income for such year by including therein the petitioner's distributive shares of the partnerships for the period March 31, 1922, to September 30, 1922.

The parties further stipulated that the action of the Commissioner in including the income of the partnerships for the period March 31, 1922, to September 30, 1922, in petitioner's return for 1922, raises the only issue involved.

OPINION.

LITTLETON: The issue here raised is identical with that decided to-day in , and consistent therewith we hold that the Commissioner was in error in including the income of the partnerships for the period April 1, 1922, to September 30, 1922, in petitioner's return for the calendar year 1922.

Judgment will be entered under Rule 50.