55 F.2d 751 | D.D.C. | 1932
Appeal from a decision of the Board of Tax Appeals (18 B. T. A. 923) affirming a determination of the Commissioner of Internal Revenue under which attorney’s fees and earnings of appellant were held to he income and taxable to him under the Revenue Act of 1921 (chapter 136, 42 Stat. 227).
Appellant is a lawyer and a member of the-firm of Luce & Kipp, of Rutherford, Ñ. J. On January 1, 1920, he executed an instrument which recited that thereafter “one-half of all net profits, salary, or other compensation or income,” which otherwise would accrue to him as a member of the firm, should accrue to him as trustee for the use and benefit of his wife, and that the affairs of the partnership and its accounting with him during each year and at the end thereof were to be conducted as theretofore, as though the trust had not been created, but that at the end of each year he was to account to his wife, as trustee as aforesaid, for “one-half part of the total net profits, salary, or other compensation or income” which on that date had accrued to him according to the books of the firm.. The term of the trust was to he limited to the period of the joint lives of himself and wife. On March 5, 1921, he executed a similar instrument covering income from services rendered or performed by him otherwise than as a member of the firm of Luce & Kipp.
For the year 1922 appellant filed an individual return, and, in addition, fiduciary returns as trustee under the foregoing declarations of trust. In her return, his wife accounted for the sums received by her from her husband. The deficiency determined against appellant resulted from the addition to his income of the sum of $7,175.85, reported by his wife as income received by her under the declarations of trust.
The ease is ruled by the decision of the
The fees earned by appellant in the practice of his profession are compensation for personal services and taxable to him. “However the matter might stand between husband and wife,” he could not .escape the tax by an anticipatory contract “devised to prevent the salary when paid from vesting even for a second in the man who earned it.”
It follows that the decision must be affirmed.
Affirmed.