Morf v. Commissioner , 6 B.T.A. 309 ( 1927 )

F. WILLIAM MORF, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Morf v. Commissioner

Docket No. 8921.

United States Board of Tax Appeals

6 B.T.A. 309; 1927 BTA LEXIS 3554;

February 24, 1927, Promulgated

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An individual who kept his books and filed his returns on the calendar year basis and who was a member of a partnership which kept its books on the basis of a fiscal year ended in the calendar year 1924, is not entitled to the benefit of the 25 per cent reduction in tax provided in the Revenue Act of 1924, for the year 1923, with respect to his share of the partnership profits for the fiscal year ended in the calendar year 1924.

Fayette B. Dow, Esq., for the petitioner.

W. F. Gibbs, Esq., for the respondent.

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KORNER

Proceeding to redetermine deficiency in income tax for the year 1924 determined by the Commissioner in the amount of $3,998.52.

FINDINGS OF FACT.

The petitioner is an individual residing in Chicago, Ill., and was, at the time here in question, a copartner in a business trading as C. H. Weaver & Co. The partnership operated and filed its tax returns on a fiscal year basis. Its fiscal year ended March 31, 1924. The petitioner's share of the profits of the partnership for the fiscal year ended March 31, 1924, attributed to the year 1923, was $54,275.41. This amount was reported in the petitioner's income-tax return for the calendar year 1924 as taxable at 1923 rates. This return of income was reported on regular printed return "Form 1040 FY," which provided "for Calendar year 1924 if income is derived from a partnership or fiduciary computed on a fiscal year basis." Such form of return provided for separate computation of taxes on income taxable at 1923 rates and a deduction of 25 per cent of such taxes computed at 1923 rates. The total tax on petitioner's income, taxable at 1923 rates, without the deduction of 25 per cent, is in the amount of $14,873.62. Twenty-five per cent of this amount is $3,718.40. The total tax on petitioner's income, taxable at 1923 rates, less a deduction of 25 per cent, would be $11,155.22.

The Commissioner disallowed the deduction of 25 per cent above referred to.

OPINION.

KORNER, Chairman: The sole issue presented here is the right of the petitioner to deduct 25 per cent of his income received in 1924 as his share of partnership profits for the fiscal year ended March 31, 1924, under the provisions of sections 1200 and 1201 of the Revenue Act of 1924. The resolution of this issue is controlled by the prior decisions of the Board in , and .

Judgment will be entered for the respondent.