Cox v. Commissioner

Memorandum Opinion

TURNER, Judge: The respondent determined a deficiency in income tax against the petitioner for the calendar year 1943 of $36,622.37, and for the calendar year 1944, a deficiency of $9,768.33.

The petitioner is an individual who resides in Miami, Florida. The deficiencies in question were the result of the respondent's determination that the business conducted in Miami, during the years 1943 and 1944, under the name Auto-Marine Engineers, was the individual enterprise of petitioner, and not that of a partnership owned two-thirds by petitioner and one third by his wife, Edna, as claimed by petitioner.

An oral partnership agreement, later reduced to writing, was entered into between the petitioner and his wife, to be effective from January 1, 1943. Partnership books were set up and partnership returns of income were made and filed on the basis of a fiscal year ending August 31 of each year. The individual income tax returns of the petitioner were made on the basis of a calendar year. Having concluded and determined, as he did, that the business of Auto-Marine*155 Engineers was the individual enterprise of the petitioner, and not that of the partnership, which kept its books and reported its income on the basis of a fiscal year ending August 31, 1943, the respondent, in his determination of the deficiencies herein, made adjustments of the income of the business to conform to the calendar year, on which basis the petitioner reported his income, as contrasted with the fiscal year, the basis on which the partnership income was reported.

Since the case was heard and the petitioner's brief was filed, the respondent has formally advised the Court that he now concedes to the petitioner "the issue involving the validity of the partnership between petitioner and his wife during the taxable years 1943 and 1944."

At the hearing, the parties filed a stipulation of various facts and figures relating to or showing the results of the business operations of Auto-Marine Engineers for the period January 1, 1943, to August 31, 1943, and for the fiscal year ended August 31, 1944. To the extent appropriate to and in conformity with the above disposition of the partnership issue, effect will be given to the stipulation of the parties in recomputations under*156 Rule 50.

Decision will be entered under Rule 50.