Commissioner v. Johnston

HICKS, Circuit Judge.

Petition of the Commissioner of Internal Revenue to review a decision of the Board of Tax Appeals reversing his action in assessing a deficiency in income taxes against respondent in the amount of $5,951.39 for 1932. The case turns on the right of respondent to deduct losses in connection with the sale of certain securities.

The basic facts are undisputed. As found by the Board they are as follows:

In July, 1929, respondent created a trust for the benefit of his wife and deposited securities therein costing $109,366.25. The trust was revocable on fourteen months’ notice.…