Munsey Trust Co. v. Commissioner

*927 The Commissioner has determined a deficiency of $622.09 in the petitioner's income tax for the calendar year 1923. The petitioner alleges that the Commissioner erred (1) in adding to petitioner's income a profit of $3,872.08, alleged to have arisen from the sale of certain real estate in the District of Columbia; (2) in adding to petitioner's income a profit of $6,361.15 alleged to have been realized from the receipt of a one-half interest in a note of the Carry Manufacturing Co. for $25,000 which was due February 15, 1923.

FINDINGS OF FACT.

The petitioner is a corporation incorporated under the laws of the District of Columbia, with its place of business in Washington, D.C.

By trust agreement dated May 17, 1923, it became trustee of all property then owned by Hilda Portner Derby. This property was listed in a schedule attached to the trust instrument. There was no other agreement between Hilda Portner Derby and the petitioner whereby the latter became trustee of any of her property. The two pieces of property*2213 which are the subject of this appeal, namely, certain real estate situated at 1104 Vermont Ave., Washington, D.C., and a promissory note of the Carry Manufacturing Co. for $25,000, due February 15, 1923, were not mentioned in the schedule and were not part of the trust property during the taxable year. The Commissioner determined that the petitioner had received a profit of $3,872.08 from the sale of the above mentioned real estate and had received a profit of $6,361.15 from the note above mentioned.

OPINION.

MURDOCK: It was conceded by counsel for the respondent that the tax liability of the petitioner, if any, attached by virtue of a trust agreement dated May 17, 1923. The real estate on Vermont Avenue and the Carry Manufacturing Co. note were not covered by this agreement and the petitioner further proved that it had never received anything from the sale of the property or from the note. There was also some testimony tending to show that the two transactions in question had occurred prior to the time that the Munsey Trust Co. became trustee and that the proceeds of the sale of the *928 real estate were distributed before the Munsey Trust Co. became trustee.

*2214 Judgment will be entered for the petitioner under Rule 50.