Ersel H. Beus and Anna Beus, W. J. Beus, and Leone Beus v. Commissioner of Internal Revenue

At all material times, petitioners (hereinafter “taxpayers”) Ersel H. Beus and Anna Beus have been and are husband and wife residing at Nyssa, Oregon, and for the year 1952 filed their joint income tax return with the Director of Internal Revenue for the District of Oregon. Also, at such times, petitioners (hereinafter “taxpayers”) W. (William) J. Beus and Leone Beus have been and are husband and wife residing at the same place, and for the same year filed their joint income tax return with the same Internal Revenue Director. Said Ersel and W. J. Beus are brothers, and at all material times have been partners operating the partnership farming business of Beus Bros, on two farms located not far apart in different communities on opposite sides of the Snake River, one of such farms being in Payette County, Idaho and the other in Malheur County, Oregon.

In those 1952 tax returns, taxpayers claimed deductions for that year for such husbands’ partnership business losses, (1) $20,000 for alleged abandonment that year of irrigation facilities connected with their Idaho farm and (2) $15,000 for alleged rental payments that year on their Oregon farm. In 1955 the Acting Commissioner,…