Commissioner of Internal Revenue v. Thomas, 7788.
| Decision Date | 09 July 1936 |
| Docket Number | No. 7788.,7788. |
| Citation | 84 F.2d 562 |
| Parties | COMMISSIONER OF INTERNAL REVENUE v. THOMAS. |
| Court | U.S. Court of Appeals — Fifth Circuit |
J. P. Jackson and Sewall Key, Sp. Assts. to Atty. Gen., Robert H. Jackson, Asst. Atty. Gen., and Hartford Allen, Sp. Atty., Bureau of Internal Revenue, of Washington, D. C., for petitioner.
Walter E. Barton, of Washington, D. C., for respondent.
Before FOSTER, SIBLEY, and HUTCHESON, Circuit Judges.
Respondent, Pat Morgan Thomas, a resident of Texas, filed a joint return for himself and wife for income taxes for the year 1930, showing a net loss of $4,441.10, and no taxable income. The Commissioner disallowed the loss claimed and determined a deficiency of $1,721.71 in taxes. The Board of Tax Appeals decided there was no deficiency. This appeal followed.
The loss was claimed as resulting from the sale of 200 shares of stock of the Central Chevrolet Company of Houston, made to respondent's wife on October 26, 1930, for which she paid in cash from her separate estate. Before the Board, respondent abandoned his claim for the entire loss and reduced it to his one-half interest in the community. The Commissioner challenged the bona fides of the sale before the Board, but now concedes that he is bound by their adverse decision on the facts and urges only an error of law, to wit, that the Board should have held that on a joint return interspouse transactions must be disregarded in determining taxable income.
Section 51 Revenue Act of 1928 (c. 852, 45 Stat. 791, 807, 26 U.S.C.A. § 51 and note), which governs, is as follows:
There is no Treasury Regulation section 51, but it is argued that sections 141, 142 of the act (45 Stat. 831, 832), providing for consolidated returns of affiliated corporations, and the regulations and decisions applicable to those sections should be applied by analogy. On this it is contended that the husband and wife filing the joint return constituted a single tax computing unit, which still owns the stock sold by the husband to his wife and has sustained no loss. III-I Cumulative Bulletin 149, Art. 147, sustains this conclusion, but the Commissioner cites no other authorities in point.
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Janney v. Commissioner of Internal Revenue, 7130.
...particularly in view of the denials of certiorari by the Supreme Court." 7 26 U.S.C.A. § 23, Historical Note (r). 8 See Commissioner v. Thomas, 5 Cir., 84 F.2d 562, 563: "Section 51, supra permitting husband and wife to file a joint return is clearly intended by Congress to be in favor of t......
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Pierce v. Commissioner of Internal Revenue, 30.
...that where a husband has sold property to his wife at a loss, the loss he sustained may be deducted in the joint return. Commissioner v. Thomas, 5 Cir., 84 F.2d 562; Commissioner v. Brumder, 7 Cir., 82 F.2d 944; Hill v. United States, 12 F.Supp. 798, Ct.Cl. See, also, Gummey v. Commissioner......
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Niles v. Milbourne
...court decisions to which reference has been made, the facts in which are the more closely akin to the facts here, are those in Commissioner v. Thomas, 84 F. 2d 562, a decision of the Circuit Court of Appeals of the Fifth Circuit, rendered in 1936; and in Commissioner v. Behan, 90 F.2d 609, ......