Estate of John E. Morris, Deceased. John M. Morris v. Commissioner of Internal Revenue

The Commissioner of Internal Revenue claims a deficiency in the income tax of John E. Morris (“Taxpayer”) in the amount of $35,115.10 for the year 1964. The Tax Court, with four judges dissenting, held that no deficiency existed, and this is the Government’s appeal.

The Tax Court in this case, 55 T.C. 636 (1971), and the Third Circuit in In re Goodman’s Estate, 199 F.2d 895 (1952), have so thoroughly canvassed the issue that it will suffice here to give a brief summary without retreading the same ground.

The facts were stipulated below and are not in issue. Taxpayer and his wife owned certain…