H. S. Anderson, Jr. v. United States

Consolidated for trial and on this appeal are several actions brought by appellants to recover alleged overpayments of income tax for the years 1942 and 1943. Relief was denied in the trial court.

Taxpayers assert two reasons why they should be allowed deductions, first on the ordinary and necessary business expense provision of the Internal Revenue Code of 1939, § 23(a), 26 U.S.C.A., and secondly under the depreciation provision of the 1939 Code, § 23 (Z).

The following facts either were stipulated or appear in the findings of the trial court. H. S. Anderson, Sr. at the time of his death, on December 27, 1941, held partnership interests in two co-partnerships, viz. “H. S. Anderson,” hereafter referred to as the California partnership, and “Anderson Brothers Supply Company of Alaska,” hereafter the Alaska partnership.

The California partnership was created in 1938 by oral agreement of H. S. Anderson, Sr., who held a 75% interest and his son, appellant H. S. Anderson, Jr. who held the remaining 25% interest.

The Alaska partnership was created by written agreement in 1940, H. S. Anderson, Sr. holding a 40% interest, the remainder held by appellants H. S. Anderson, Jr., Robert W.…