R. Guy Bennett and R. Guy Bennett, of the Estate of Mildred Bennett, Deceased v. United States

This is an action to recover federal income taxes and interest allegedly overpaid by appellant for the taxable year ending December 31, 1955, recovery of which was denied by the district court.

The district court had jurisdiction under Title 28 U.S.C.A. § 1346 (a) (1). This Court has jurisdiction under Title 28 U.S.C.A. §§ 1291 and 1294.

Appeal from the final judgment of the district court was taken by appellant R. Guy Bennett individually and as executor of the estate of his wife, Mildred Bennett, deceased. Bennett and his wife filed a joint federal income tax return for the taxable year 1955. Since the estate is a party only by reason of the joint return, we will hereafter for convenience refer only to Bennett as the taxpayer.

The taxpayer operated the Guy Bennett Lumber Company as a sole proprietorship which engaged in the sawmill and lumber business, the principal office of which was in Clarkston, Washington. A branch plant was maintained in Moscow, Idaho. The income from the business was reported by the taxpayer on an accrual basis.

During the calendar year 1955 and within two and one-half months thereafter, the taxpayer’s two sons, Richard Guy Bennett and Frank Bennett,…