Thacher v. Lowe
| Citation | 288 F. 994 |
| Parties | THACHER et al. v. LOWE. |
| Decision Date | 22 November 1922 |
| Court | U.S. District Court — Southern District of New York |
Davies Auerbach & Cornell, of New York City, for plaintiffs.
Francis G. Caffey, U.S. Atty., of New York City, for defendant.
The question in this case is a narrow one, and is merely whether the farm which Mr. Davies operated during his lifetime at his residence on Long Island was a 'lawful business carried on for gain or profit. ' I have no doubt that a lawyer can operate a farm for profit. However unlikely it may be that he will succeed in the enterprise, the enterprise may in fact be intended as a business. But it is equally clear that a lawyer may run a farm merely as an adjunct to his country place, and between the two the test appears to me to be only of his actual intention. Moreover, in ascertaining that intention, I can see no escape from making the crux of the determination his receipts and expenditures.
In this case we have only the evidence of two years during each of which the expenses of the farm were over $16,000, while there was an income in one year of only $1,100 and in another of $1,600. That is all we have to go on, and it is quite evident that in those two years not only was there no profit, but there was a very heavy loss. There is no suggestion that at any previous time Mr. Davies had made any money out of the farm. He lived off it in part, he and his family, by getting his supplies from it, and that is properly to be considered as a part of his profits. Still there is no evidence of the value of those supplies or that added to his returns they made the venture profitable. The plaintiff has the burden and it is difficult to imagine how a farm which has been running the number of years which this had could be thought capable of turning a deficiency of 90 per cent. into a profit.
This is a different case from Wilson v. Eisner (C.C.A.) 282 F. 38. There Mr. Wilson ran a racing stable in Kentucky, and he made money on it for about a third of the time, though for two-thirds of the time he lost. The Circuit Court of Appeals said that, as he had sworn that he was running it as a business and in the hope of making money, the judge ought to have believed him and ought to have directed a verdict for him, corroborated as he was by the evidence of past years. In Plant v. Welsh (D.C.) 280 F. 722, Judge Thomas though that Mr. Plant's farm, which was very like...
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Helvering v. Highland
...App.D.C. 85, 69 F.2d 571; Union Trust Co. v. Commissioner, 6 Cir., 54 F.2d 199; Deering v. Blair, 57 App.D.C. 367, 23 F.2d 975; Thacher v. Lowe, D.C., 288 F. 994; see Deputy v. Du Pont, 308 U.S. 488, 500, 60 S.Ct. 363, 84 L.Ed. 416. Similarly, the fact that a separate office is maintained i......
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Cecil v. Commissioner of Internal Revenue
...877) but not necessarily controlling, as the nature of the enterprise and its financial results may be even more important. Thacher v. Lowe, D.C., 288 F. 994. That substantial losses, rather than some net profit, have resulted does not prevent the enterprise from being a business within the......
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Whitman v. United States, Civ. A. No. 10518
...Wright v. United States, 249 F.Supp. 508 (D.C.Nev.1965); Du Pont v. United States, 234 F.Supp. 681 (D.C.Del.1964). But in Thacher v. Lowe, 288 F. 994 (S.D.N.Y.1922), where a lawyer operated a farm for several years with a deficiency of 90 per cent., it was held that he would not with reason......
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Simenon v. Comm'r of Internal Revenue
...312 U.S. 212. Whether or not a taxpayer engages in activities for the purpose of obtaining a livelihood is significant. Thatcher v. Lowe, 288 F. 994; Doggett v. Burnet, 65 F.2d 191; and Commissioner v. Field, 67 F.2d 876, affirming 26 B.T.A. 116. Other factors to be given much weight are th......