N. Gordon Phillips and Lauretta M. Phillips v. Commissioner of Internal Revenue

This is a petition for review of a Tax Court decision, decided adversely to petitioners. Int.Rev.Code of 1954, § 7482, 26 U.S.C.A. § 7482 . Petitioner’s wife is interested only as a signer of a joint return, and by reason of the California community property laws. The word “petitioner” herein refers to both husband and wife.

The deficiency determined was for the year 1951 and was the sum of $15,525.59. The amount thereof herein contested was and is the sum of $12,056.00. This sum is one-fourth of the proceeds of 320 shares of stock sold by petitioner in 1951, at which time he sold 10,890 additional shares. The proceeds from these additional shares are not here involved. The proceeds of the 320 shares were originally included in petitioner’s 1951 return, but, by reason of subsequent events, are now sought to be excluded.

The facts are not disputed, but their legal effect is. Because the case was tried on a stipulation of facts, plus the limited testimony of petitioner N. Gordon Phillips, we adopt the Tax Court’s summary of the evidence, as a fair statement. It is set forth in the margin.

The Tax Court likewise accurately sets forth the respective positions of the parties hereto.…