Dohrmann v. Commissioner , 19 B.T.A. 466 ( 1930 )

ANDREW B. C. DOHRMANN, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Dohrmann v. Commissioner

Docket No. 23969.

United States Board of Tax Appeals

19 B.T.A. 466; 1930 BTA LEXIS 2399;

March 31, 1930, Promulgated

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Under authority of decision by the Supreme Court in Lucas v. Earl,281 U.S. 111">281 U.S. 111, held that the wife correctly returned her own salary.

Ralph W. Smith, Esq., and Homer Tooley, Esq., for the petitioner.

Eugene Meacham, Esq., for the respondent.

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LOVE

This proceeding is for the redetermination of deficiencies in income tax for the years 1922 and 1923, in the amounts of $1,176.52 and $3,838.23, respectively. The only error assigned is that the respondent erroneously included in petitioner's taxable income for each of the years 1922 and 1923, the amount of $9,000 received each year by petitioner's wife as salary from the A.B.C. Dohrmann Co. and reported by her as her separate income.

FINDINGS OF FACT.

The petitioner is an individual with his office at 135 Stockton Street, San Francisco, Calif.

During each of the years 1922 and 1923, the petitioner's wife received as salary from the A.B.C. Dohrmann Co. the amount of $9,000 which she reported as income in her separate income-tax returns for those years. During the years 1922 and 1923 the petitioner and his wife had an oral understanding to the effect that the salary she received belonged absolutely to her as her own separate property. The respondent included in petitioner's income for each of the years 1922 and 1923, respectively, the amount of $9,000 received by his wife.

OPINION.

LOVE: The petitioner contends that his wife's earnings for the years 1922 and 1923 belonged to her as her separate property and were correctly returned by her in the first instance. The respondent contends that under the laws of the State of California such earnings become community property and, under , should be taxed to the husband. It may be well to note that under the laws of the State of California, a wife is competent to contract with her husband. This is not true in some of the States. In , the court said, inter alia:

In the absence of a valid agreement to the contrary, it is conceded the earnings of either spouse become community property.

As presented by the pleadings, as well as by contentions of both parties at the hearing, the issues raised were:

First, an issue of fact as to whether or not there was an agreement, a contract, between the husband and wife that her salary should be her separate income and not community income under the laws of the State of California.

Second, an issue of law as to whether or not, regardless of the issue of fact as to whether there was such a contract, the income was, under the laws of the State of California, community income, and as such, made returnable by the husband under the decision in the case of

Since the hearing in the instant case, the Supreme Court has handed down its opinion and decision in the case of . In view of the holdings of the court in the Earl case, it is unnecessary for us to decide either of the issues presented in this case.

Under the Earl case, we hold that the salary in question was correctly returned by the wife who earned it.

Reviewed by the Board.

Judgment will be entered under Rule 50.

MURDOCK dissents.