Montgomery v. Commissioner

LeMiee, /.,

dissenting: The majority view sustains the respondent’s determination that the income of the Jacksonville Blow Pipe Company is taxable in its entirety to the petitioner, apparently upon the principle that income is taxable to the person who earns it. Cf. Robert E. Werner, 1 T. C. 39. I am unable to agree that the rule invoked is properly applicable to the facts in this case.

The record establishes that on October 14, 1940, the petitioner sold the business he conducted under the name of the Jacksonville Blow Pipe Company to his wife for the sum of $4,000. The consideration paid was…