J. Sterling Halstead and Marcella S. Halstead v. Commissioner of Internal Revenue

J. Sterling Halstead, whom we shall refer to as the taxpayer, made annual written agreements with John P. Phillips to form a partnership for the practice of law. The taxpayer intended to create a partnership, thought he had done so, and for nine years filed tax returns for the partnership, whose fiscal year ended March 31, and in his own return on the calendar year basis included his share of partnership income, as required by § 188 of the 1939 Code, 26 U.S.C.A. § 188.

The taxable year in suit is 1953. For that year the partnership return showed the taxpayer’s share of income as $36,-389.73…