A. T. Jergins Trust v. Commissioner

Petitioner seeks to review the determination of the United States Board of Tax Appeals upon a determination by the Commissioner of Internal Revenue proposing deficiencies in income taxes for the calendar years 1922, 1923, and 1924. The Board of Tax Appeals rejected the contention of the petitioner that it was exempt from income tax, and sustained its contention with reference to the manner of the determination of the depreciation and depletion items. Petitioner appeals from the former, and the Commissioner from the latter, part of the decision. If the contention of the A. T. Jergins Trust is sustained, it will be unnecessary to consider the Commissioner’s petition. We will refer throughout to the A. T. Jergins Trust as “the petitioner,” and to the Commissioner of Internal Revenue as “the respondent” or “the Commissioner.”

The facts are stated in the opinion of the B'oard of Tax Appeals, and are not in dispute. We will state the salient facts and *93 refer to the findings of the Board of Tax Appeals for a more detailed statement.

In 1911 the city of Long Beach issued bonds, and with the proceeds thereof purchased the water system whieh had theretofore been furnishing the city and…