Johnson v. Commissioner of Internal Revenue

THOMAS, Circuit Judge.

This appeal is from a decision of the Board of Tax Appeals (39 B.T.A. 702) sustaining the Commissioner in determining a deficiency of $4,840.19 in the petitioner’s income tax liability for the years 1934 and 1935. The question presented is whether in computing her net income for these years the taxpayer was entitled to deduct as interest paid on indebtedness certain payments made by her to each of her three sisters. The Commissioner denied the deductions as not within the meaning of section 23 of the Revenue Act of 1934, c. 277, 48 Stat, 680, 26 U.S.C.A. § 23(b), which…