DocketNumber: Docket No. 8294
Citation Numbers: 12 T.C. 1069, 1949 U.S. Tax Ct. LEXIS 165
Judges: Arundell
Filed Date: 6/14/1949
Status: Precedential
Modified Date: 1/13/2023
*165
From 1930 to 1941 petitioner's decedent acted as an administrator of an estate. During the taxable year 1941 he expended $ 1,500 representing attorney's fees and $ 10,000 in settlement of an action brought by the dissatisfied heirs.
*1069 OPINION.
This proceeding*166 arises from the decision of the Circuit Court of Appeals for the Eighth Circuit in
In
*167 The Circuit Court of Appeals, in
*1070 It is apparent from the record that petitioner's decedent was not engaged in a trade or business as an administrator in the sense that such a business is conducted by a corporate trustee or by an individual who regularly engages in the business of serving as a trustee or as an executor. Cf.
Josephs, since 1891 and throughout the years he acted as an administrator in the Freimuth estate, was engaged in the scrap iron business in Duluth, Minnesota. Prior to Freimuth's death he had been a friend of the decedent, was acquainted with his family, and, on Freimuth's death in 1930, was unanimously chosen by the heirs to act as one of the three administrators. It may be conceded that Josephs was a constant source of financial advice, that he filed numerous reports, conferred with the heirs, and performed other valuable services in connection with the administration of the estate. As an administrator he was a stockholder and director of the Delaware corporation from 1930 to 1934 and a stockholder in the succeeding Minnesota corporation from 1934 to 1941, but it is clear that the actual*169 management of the business was principally in the hands of David Freimuth, an heir and coadministrator, and not in Josephs.
The record provides us with little of the detail of Josephs' activities as administrator. The evidence that has been presented indicates to us that the scope of his activities was not sufficient to classify him as anything more than a casual administrator. After careful consideration of all the evidence, we find, in addition to the facts found by us in
In its opinion in
In any event, in the light of our conclusion that Josephs was not carrying on a trade or business, it follows that the amounts in issue are not deductible under
*.
In computing net income there shall be allowed as deductions:
(a) Expenses.
(1) Trade or business expenses. --
(A) In General. -- All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business * * *.↩