Drenten v. Commissioner , 11 T.C.M. 1048 ( 1952 )

Henry Drenten v. Commissioner.

Drenten v. Commissioner

Docket No. 31223.

United States Tax Court

1952 Tax Ct. Memo LEXIS 56; 11 T.C.M. (CCH) 1048; T.C.M. (RIA) 52311;

October 27, 1952

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John J. Raymond, Esq., 1655 Guardian Bldg., Detroit, Mich., for the petitioner. John L. King, Esq., for the respondent.

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MURDOCK

Memorandum Findings of Fact and Opinion

The Commissioner determined a deficiency of $4,704.02 in income and victory tax for 1943 and deficiencies of $965.88 for 1944 and $2,886.80 for 1945 in income tax of the petitioner. The only issue for decision is whether the Commissioner erred in taxing 75 per cent of the income from a celery farm to the petitioner instead of 50 per cent.

Findings of Fact

The petitioner filed his individual income tax returns for the taxable years with the collector of internal revenue for the District of Michigan. His wife, Grace V. Drenten, filed separate returns for those years.

The petitioner and his wife Grace lived at Hamilton, Michigan. They owned as tenants by the entireties thirty-five acres of land located about one-half mile from their home. The cost of the farm was $10,000. Twenty acres thereof were purchased in 1934 and a deed for that part was received at some undisclosed time in 1943. The other fifteen acres were purchased in 1938 and a deed for that part was received in that year.

The petitioner was an experienced celery farmer and during the taxable years he used twenty-eight acres of the farm to raise celery. He employed from five to fifteen persons to assist him, five of whom were employed most of the time and the others were employed during the busy season.

The petitioner's wife helped make containers, helped transplant in the greenhouse, kept the books, took care of time cards and wrote out checks, all in connection with the celery farm business.

There was a tool shed, a barn, a greenhouse and a celery house on the property. The petitioner owned and used on the farm two Cletracks, one Caterpillar tractor, a number of engines to operate transplanters, six or seven wagons and a number of smaller items.

The celery was shipped to Chicago where it was sold by commission merchants who retained their commissions and remitted the balance to the farmer.

The petitioner and his wife reported equal amounts of the farm income in their returns for the taxable years. The Commissioner, in determining the deficiencies, made some adjustments which are not now contested and held that 75 per cent of the income of the farm was taxable to the petitioner and 25 per cent to his wife.

Opinion

MURDOCK, Judge: This case is not distinguishable from H. D. Webster, 4 T.C. 1169">4 T.C. 1169, in which a husband and wife both participated in the operation of a restaurant in real property which they owned as tenants by the entirety. It was there held that one-half of the income from the business was taxable to each. The same result should be reached in this case.

Decision will be entered under Rule 50.