Estate of Balin v. Commissioner

Memorandum Opinion

VAN FOSSAN, Judge: Upon examination of the joint return filed by William Balin and Elka Balin, husband and wife, for the year 1941, the respondent determined a deficiency of $628.73 in income tax of the petitioners.

The petitioners allege error in three respects: (1) the disallowance of expenses in the amount of $655 claimed to have been incurred in the production of income; (2) the disallowance of $1,607.35 claimed as expenses incurred in a business venture; and (3) the addition to income of a short-term capital gain in the amount of $455.31.

At the hearing the respondent conceded error in the addition to income of the short-term capital gain but put the petitioners on proof as to the other items.

The petitioners submitted certain cancelled checks in evidence which, it was claimed, were issued to pay for services of two lawyers in connection with trips to Florida made by William Balin, later deceased. Elka Balin did not accompany her husband to Florida and had no knowledge of the expenses. About the only facts she could testify to were that her husband was seeking*41 a business opening in Florida and that nothing of the kind developed as the result of the trips. There were no other witnesses.

The evidence in the case is entirely too meager and too vague to permit us to make any finding that the expenditures were either incurred in a trade or business or in a transaction entered into for profit. To make any allowance would require sheer speculation as to the facts. This we can not do. The items are not shown to have been allowable as business deductions or as business losses. The burden of proof rested on the petitioners. On the record made they have failed to carry this burden as to these items.

Decision will be entered under Rule 50.