Marshall v. Commissioner of Internal Revenue, 16073.
| Decision Date | 22 April 1957 |
| Docket Number | No. 16073.,16073. |
| Citation | 240 F.2d 185 |
| Parties | Samuel W. MARSHALL, Jr., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. Frances McClellan MARSHALL, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Julius H. Runge, Dallas, Tex., for petitioners.
Elmer J. Kelsey, Atty. Dept. of Justice, Washington, D. C., Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, Robert N. Anderson, Carolyn R. Just, Attys., John Potts Barnes, Chief Counsel Internal Revenue Service, Vernon F. Weekley, Sp. Atty., Washington, D. C., for respondent.
Before CAMERON, JONES and BROWN, Circuit Judges.
Samuel W. Marshall, Jr., and his wife, Frances M. Marshall, petitioned for a review of a decision of the Tax Court sustaining the Commissioner in disallowing income tax deductions for the years 1947 through 1950 to the extent claimed by petitioners.1 Marshall and his wife claimed a net loss carry-over from 1947 to 1949 under § 122(b) (2) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 122(b) (2). The Commissioner denied this deduction on the basis that the 1947 loss was not as great as Taxpayers alleged and that it was absorbed in connection with the 1948 income, which was greater than was stated. Portions of claimed subsistence expense for the years 1948 through 1950 were disallowed by the Commissioner and aircraft expense for 1949 and 1950 was reduced. Our only question here is whether petitioners have sustained the burden of overcoming the presumed correctness of the Commissioner's findings with respect to these items.
The facts, as partially stipulated and as found by the Court, are as follows: petitioners owned a residence in Dallas in which Frances and their two daughters lived at all times material hereto and in which Samuel resided while he was in Dallas. They also maintained an apartment in Washington, D. C. The principal business of Marshall during this period was that of a consulting engineer. He maintained offices in Washington and Dallas through April, 1948, when he closed his Dallas office and moved most of his equipment and records to Washington. During the years in question Marshall's major business enterprise was carried on from Washington where he was in the process of endeavoring to collect money due him for work that he had performed for the Navy.
Marshall owned and operated an aircraft in his business during the years in question. He made numerous trips to Dallas during these years where his family was residing and where he attended to a small amount of business pertaining to rental property owned there and the financing of a loan through a Dallas bank.
The Commissioner allowed expense deductions of $12,424.87 for 1947 out of $15,143.31 claimed, and allowed $12,396.22 as depreciation expense of aircraft out of $14,961.91 eventually claimed for that year. Petitioner admitted, that for the year 1947, his original expense connected with the aircraft was overstated in the sum of approximately $8,000.00, which he attributed to too great a depreciation on the aircraft. A deduction for the claim of piano lessons for Frances Marshall was disallowed by the Commissioner for the years 1949 and 1950. No appeal was taken from this disallowance.
In 1948, petitioners expended $8,189.29 on a building project in Dallas which was abandoned that year for cause. They claimed a $7,680.29 loss, of which the Commissioner allowed $5,680.29. Petitioners continued to own the lot, the foundation, some fencing and structural steel, all of which was used in 1950 in the construction of another building.
Petitioners claimed deductions of $7,322.16 in the years 1948 through 1950 for subsistence expense in connection with the maintenance of the Washington office and aircraft expense of $4,476.22 for the years 1949 and 1950. The Commissioner disallowed all the amounts claimed as subsistence expense and $3,357.16 of the aircraft expense, on the ground that the amounts disallowed were personal expenses. The Court upheld the Commissioner's ruling under Commissioner of Internal Revenue v. Flowers, 1945, 326 U.S. 465, 66 S.Ct. 250, 90 L.Ed. 203, and Hammond v. Commissioner, 5 Cir., 1954, 213 F.2d 43. It also sustained the remaining findings of the Commissioner, expressing the opinion generally that the evidence did not warrant a finding that petitioners...
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