Schwobel v. Commissioner

Memorandum Findings of Fact and Opinion

WITHEY, Judge: The Commissioner has determined deficiencies in the income tax of the petitioners for the following years in the indicated amounts:

The only issue presented is whether during the taxable years 1960 and 1961 the petitioners Leonard Schwobel and Carole S. Schwobel or petitioners Otis Tom Budd and Jewell D. Budd furnished more than one-half of the support of three minor children who are the issue of the former marriage of Leonard Schwobel and the present Jewell D. Budd, and are therefore entitled to the dependency exemption for the children.

Findings of Fact

Some of the facts have been stipulated and are found accordingly.

Leonard Schwobel and Carole S. Schwobel were husband and wife during 1960 and 1961, resided in Fort Worth, Texas, *179 and filed their joint Federal income tax returns for those years with the district director in Dallas, Texas. Otis Tom Budd and Jewell D. Budd were husband and wife during 1960 and 1961, resided in Austin, Texas, and filed their joint Federal income tax returns for those years with the district director in that city.

Leonard Schwobel, before his marriage to Carole S. Schwobel, his present wife, was married to Jewell Davis, who is presently the wife of Otis Tom Budd. The issue of the marriage between Leonard Schwobel and Jewell Davis were as follows:

On October 24, 1957, the District Court of Tarrant County, Texas, 153rd Judicial District, granted a divorce to Jewell Davis Schwobel in Cause No. 8425-F, styled Jewell Davis Schwobel v. Leonard Schwobel. In the divorce decree the court granted custody of the above-named three children to Jewell Davis Schwobel, subject to Leonard Schwobel's right to reasonable visitation of them. Leonard Schwobel was ordered to pay to the Collector of*180 Child Support in Tarrant County, Texas, the sum of $125 per month until the youngest child attains the age of 18 years as support for all of the children. The court further approved a separation contract entered into between Jewell Davis Schwobel and Leonard Schwobel.

Thereafter Leonard Schwobel filed a motion in the foregoing cause asking, in part, that the court prepare and arrange for a definite visitation schedule. Subsequently the court entered its order modifying the judgment of divorce and, among other things, provided that Leonard Schwobel should pay to the Collector of Child Support in Tarrant County, Texas, the sum of $125 per month, except during the summer months when he had custody of the minor children and during the period of such custody he should pay the sum of $62.50 per month. In accordance with the modified judgment of the court, Leonard Schwobel paid the sum of $1,375 each year for the taxable years 1960 and 1961 to the Collector of Child Support.

Following her divorce from Leonard Schwobel in October 1957, Jewell Davis Schwobel, in November 1958, married petitioner Otis Tom Budd and a son was born to them in July 1959 whom Budd and she supported during the*181 taxable years 1960 and 1961. After the marriage of their mother to Budd the three children of her marriage to Leonard Schwobel resided with her and Budd.

The dates of visitations of the children with their father Leonard Schwobel in Fort Worth, Texas, during the years 1960 and 1961 were as follows:

In 1960 Leonard Schwobel visited the children in Austin, Texas, on February 27, March 26, May 7, September 24, and November 5 and in 1961 on January 7, February 25, March 25, May 6, May 27, and October 7.

During the taxable years in issue Otis Tom Budd and Jewell D. Budd maintained detailed records of the expenditures made by them in the respective years for the support of James Leonard, Charles Bennet, and Michael Bruce Schwobel, including receipts for payment of such expenditures. The amounts of such expenditures were as follows for the respective years:

*182 The foregoing total amounts of $3,403.28 for 1960 and $3,842.10 for 1961 included the amounts of child support money of $1,375 paid by Leonard Schwobel during 1960 and 1961, respectively, in accordance with court order. Subtracting the $1,375 so paid by Leonard Schwobel in each of the years from the foregoing amounts of $3,403.28 for 1960 and $3,842.10 for 1961 leaves $2,028.28 for 1960 and $2,467.10 for 1961 as the amounts furnished for the support of the three children in 1960 and 1961, respectively, by petitioners Otis Tom Budd and Jewell D. Budd.

In addition to the child support of $1,375 paid by Leonard Schwobel under court order in each of the years 1960 and 1961, he paid medical bills of his sons as follows: James Leonard $5 in 1960, Charles Bennet $5 in 1961, and Michael Bruce $8.85 in 1961.

Otis Tom Budd and Jewell D. Budd furnished more than one-half of the support for the children, James Leonard Schwobel, Charles Bennet Schwobel, and Michael Bruce Schwobel for the taxable years 1960 and 1961.

Opinion

Petitioners Schwobel take the position on brief that in addition to the child support payments of $1,375 made by Leonard Schwobel in each of the years 1960 and 1961, *183 they furnished other support to the Schwobel children in amounts sufficient to bring the total amount of support furnished by them to the children to $1,766.50 for 1960 and to $1,868.35 for 1961. Except for a medical or drug bill of $5 paid by Leonard Schwobel for James Leonard in 1960 and medical or drug bills of $5 and $8.85 paid by him for Charles Bennet and Michael Bruce, respectively, in 1961, the remainder of the claimed additional support concededly represented mere estimates made by Leonard Schwobel as to which he maintained no records and which are not substantiated by the record herein. However, in view of our finding that the amounts of support furnished the children by petitioners Budd were $2,028.28 in 1960 and $2,467.10 for 1961, petitioners Schwobel would not prevail if it be conceded that the total amounts of support furnished by them to the children were the above-mentioned amounts of $1,766.50 for 1960 and $1,868.35 for 1961.

Other contentions made by petitioners Schwobel respecting the fair rental value of the dwelling owned and occupied by petitioners Budd and respecting the income of petitioners Budd and the adequacy thereof for the standard of living of the*184 Budd family are without support in the record.

Decision will be entered for the respondent in Docket No. 1739-63. Decision will be entered for the petitioners in Docket No. 1057-64.