Lead Opinion
The question to be determined on the basis of the facts stipulated is whether tbe said Milton D. Eisner, executor of the estate of decedent, is entitled to prorate the said sum of $2,634.71 over the period commencing July 1, 1921, and ended December 31, 1921. That is to say, whether he is entitled to take as a deduction in the period ended October 8, 1921, the sum of $1,431.90, which sum bears the same ratio to the said sum of $2,634.71 as the period commencing July 1, 1921, and ended October 8, 1921, bears to the entire period commencing July 1, 1921, and ended December 31, 1921, or whether, the same having been actually paid after decedent’s death as aforesaid, it must be taken as a deduction entirely in the period commencing October 9,1921, and ended December 31,1921.
Since the decedent kept his books and records upon the basis of cash receipts and disbursements, only the amounts actually expended during the taxable period involved in the payment of taxes are allowable as deductions in determining his net income. Taxes are allowed as deductions by the statute when paid or accrued according to whether a taxpayer keeps his books and records on the cash basis or accrual basis but it is only when he keeps his books and records on the accrual basis that he is entitled to take as deductions taxes accrued but not paid.
Judgment wiU be entered for the respondent.