Rose v. Grant, 5755.
| Decision Date | 19 March 1930 |
| Docket Number | No. 5755.,5755. |
| Citation | 39 F.2d 338 |
| Parties | ROSE, Collector of Internal Revenue, v. GRANT. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Clint W. Hager, U. S. Atty., and C. P. Goree, Asst. U. S. Atty., both of Atlanta, Ga. (G. M. Charest, Gen. Counsel, Bureau of Internal Revenue, and T. H. Lewis, Jr., Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., of counsel), for appellant and cross-appellee.
John M. Slaton and I. S. Hopkins, both of Atlanta, Ga., and Richard H. Wilmer, of Washington, D. C., for appellee and cross-appellant.
Before BRYAN and FOSTER, Circuit Judges, and HOLMES, District Judge.
The plaintiff below, John W. Grant, appellee and cross-appellant here, instituted an action in the United States District Court for the Northern District of Georgia against the collector of internal revenue to recover income taxes alleged to have been erroneously assessed and collected for the years 1920, 1921, and 1922.
Several errors were alleged in the computation of the tax. The court below held that in some respects the tax was incorrectly computed, but otherwise that there was no error, and entered judgment in favor of the plaintiff for an amount less than claimed by him. From the judgment so entered both parties have appealed.
The disputed credits claimed by the taxpayer embrace the following items: (1) An allowance for exhaustion, wear, and tear, including obsolescence, which the court granted, and (2) an amount bequeathed to an executor, as compensation for his services as such, which the court denied.
The collector appealed from the allowance of the first, and the taxpayer from the disallowance of the second.
As to the first item, it appears that on September 2, 1920, John W. Grant, as tenant for life under the will of his father, came into the possession and enjoyment of land in the city of Atlanta upon which is situated an office building used by him in his business.
No allowance is claimed by the life tenant for depletion of the land or for shrinkage in value of his property by reason of the expiration of his estate by efflux of time. Section 215 (b), Revenue Act of 1921, 42 Stat. 242.
Grant claims depreciation on the building and fixtures, including elevators, under section 214(a) and (8) of the Revenue Acts of 1918 and 1921 (40 Stat. 1067, 42 Stat. 240), each of which provides that in computing the net income of an individual there shall be allowed as a deduction: "A reasonable allowance for the exhaustion, wear and tear of property used in the trade or business, including a reasonable allowance for obsolescence."
The court below found the present value of the life tenant's interest in the building and elevators, and made an allowance for the years in question which we see no reason to disturb if a life tenant is entitled to any deduction which is the cardinal consideration with reference to this item.
In later Revenue Acts the question has been put at rest by amendments which it is urged clarify or construe the earlier enactments. That of 1926 provides: "In the case of improved real estate held by one person for life with remainder to another person, the deduction * * * shall be equitably apportioned between the life tenant and the remainderman. * * *" Section 214(a) (8), Act of 1926, 26 USCA § 955(a) (8).
That of 1928 says: "In the case of property held by one person for life with remainder to another person, the deduction shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant." Act of 1928, § 23(k), 26 USCA § 2023(k).
But no weight can be given to these subsequent amendments in deciding the case in hand, because all legislation is presumed to be prospective, unless the contrary clearly appears. United States v. Magnolia Company, 276 U. S. 160, 48 S. Ct. 236, 72 L. Ed. 509, Brewster v. Gage, 280 U. S. 327-337, 50 S. Ct. 115, 74 L. Ed. ___.
More than this: "The deliberate selection of language so differing from that used in the earlier acts indicates that a change of law was intended." Brewster v. Gage, 280 U. S. 327-337, 50 S. Ct. 115, 118, 74 L. Ed. ___.
Instead of the later acts construing the earlier ones, they indicate a progressive development and improvement of the legislation on the subject.
For the years in question (XXXX-XX-XX) the government claims that no one is entitled to the depreciation; that the life tenant cannot have it, because he does not own the fee, and is not compelled to restore the exhausted or renew the obsolete estate; that the remainderman cannot claim it, because the loss occurs before he...
To continue reading
Request your trial
-
Wolder v. Comm'r of Internal Revenue
...the parties and their performance in accordance with those intentions is clear and, in our opinion, the critical factor. Rose v. Grant, 39 F.2d 338, 340 (C.A. 5, 1930); Mildred E. McDonald, 2 T.C. 840, 849 (1943). 4 The absence of any conditional language in the provisions of article Fifth ......
-
Cotnam v. CIR
...by Congress." The rule of the Merriam case is well established. Bank of New York v. Helvering, 2 Cir., 1943, 132 F.2d 773; Rose v. Grant, 5 Cir., 1930, 39 F.2d 338. "If services have been performed by the recipients, it may well be said the presumption is that the payment is for the service......
-
Blenheim Co. v. Commissioner of Internal Revenue
...return is a nullity. Buttolph v. Commissioner, 7 Cir., 1928, 29 F. 2d 695; Grant v. Rose, D.C.N.D.Ga. 1928, 24 F.2d 115, affirmed, 5 Cir., 1930, 39 F. 2d 338; Morris v. Commissioner, 2 Cir., 1930, 40 F.2d 504. Cf. Scaife Co. v. Commissioner, 62 S.Ct. 338, 86 L.Ed. ___, decided by U. S. Supr......
-
Jones v. Commissioner, Docket No. 94310.
...of whether it is a bequest or taxable income depends on the intention of the parties. The cases of Rose v. Grant 1930 CCH ¶ 9230, 39 F. 2d 338 (C. A. 5, 1930), and Bank of New York v. Helvering 43-1 USTC ¶ 9217, 132 F. 2d 773 (C. A. 2, 1943), upon which respondent relies are not in point. T......