Lead Opinion
From the findings, which are substantially a narrative of the evidence, it is beyond doubt that the petitioner’s regular business included serving for pay as a trustee and as an executor. In the course of this business and as an incident thereof he was required to pay $10,000 as a liability growing out of the conduct of the business. Clearly such circumstances of the payment support its deduction, and it should have been allowed. Kornhauser v. United States, 276 U. S. 145. Respondent cites Stuart v. Commissioner, 84 Fed. (2d) 368, and Stephen H. Tallman, 37 B. T. A. 1060, to support the dis-allowance ; but in both, the ground of the disallowance was that the particular occasion for the taxpayer’s payment was liability in an isolated fiduciary activity which was not itself or incidental to a trade or business regularly carried on. They are, therefore, unlike this case and distinguishable from it in crucial facts.
Since this item of deduction is the only adjustment upon which the deficiency rests, the determination is reversed.
Decision will be entered for the petitioner.