Fooshe

This is a petition to review a decision and order of the Tax Court of the United States determining a deficiency of $1,436.37 in the income tax return of petitioner for the year 1938. The question involved is whether certain 1938 income received by petitioner, a married man, while domiciled in the State of California, was his separate property or that of the community of the spouses.

Petitioner entered the employment of Prudential Insurance Company, hereafter called the Company, in 1919 as manager of its agency in St. Louis, Missouri. The employment contract provided that the manager should receive as part of his compensation a 2y%% commission on renewal premiums when collected and paid to the Company on policies written by or through him under this contract. In the event the contract was terminated petitioner was to receive the commissions upon renewal premiums less a collection fee of 2%, that is to say, petitioner, upon leaving the agency, was to receive only % of 1% in renewal commissions — the 2% would be lost to him. But one construction can be given this contract. It is that the 2% is paid not for the service of writing the policies, but for services thereafter as manager…