The opinion
APPEAL OF E. O. FIPPIN.
Fippin v. Commissioner
Docket No. 980.
United States Board of Tax Appeals
2 B.T.A. 350 ; 1925 BTA LEXIS 2440 ;
July 14, 1925 , Decided Submitted June 17, 1925 .
*2440 On the evidence, held that the taxpayer did not receive in 1920 a taxable profit on the sale of certain property.
E. O. Fippin, pro se.
J. Arthur Adams, Esq., for the Commissioner.
JAMES
*350 Before JAMES and TRUSSELL.
This is an appeal from the determination of a deficiency in income tax for the year 1920 of $624.41. The deficiency arises from a profit alleged to have been realized by the taxpayer in that year from the sale of a certain farm located near Ithaca, N.Y.
FINDINGS OF FACT.
The taxpayer is an individual residing in Port au Prince, Haiti, a citizen of the United States, and, prior to the taxable year in question, was a professor of agriculture in Cornell University.
During the year 1913 the taxpayer purchased the farm in question for the sum of $4,900. At that time the improvements on the farm consisted of an old farmhouse and run-down outbuildings, and an orchard covering the entire tract, containing many varieties of fruit trees in the last stages of decay from the ravages of disease and insects. Upon making the purchase and entering into possession, the taxpayer, for the purpose of establishing a residence on *2441 the place, made improvements the cost of which he is not now able to establish by detailed vouchers or statements of expenditures but which are established by satisfactory oral testimony to have been approximately as follows: (a) Remodeling house and introduction of modern equipment $5,00
(b) Building and remodeling outbuildings 700
(Included garage, poultry house, and storage shed, besides taking down old buildings and changes in barn.)
(c) Taking out old trees, spraying, cultivating, and pruning old trees over a period of approximately three years before the trees were in condition to give any return. Area 16 acres 1,000
(d) New planting of trees and bushes. About 500 trees, 300 bushes, and 100 vines were planted and cared for to production 500
Amount expended in betterments 7,200
The farm was sold in 1920 for $11,000. only base its decision upon the record, determining the ultimate
*351 For the taxable years 1913 to 1920, inclusive, the taxpayer deducted in his income-tax returns alleged expenditures connected with, and depreciation of, the property claimed to be used in his business, which amounts are not disclosed by the record.
DECISION.
*2442 The deficiency determined by the Commissioner is disallowed.
OPINION.
JAMES: The correct solution of this appeal requires that there be deducted from the total cost of the property of $12,100, as above set forth, the depreciation sustained during the years when it was owned and occupied by the taxpayer; that there also be deducted any amount claimed as deductions upon prior returns which duplicated the amounts above set forth, particularly in connection with the planting, cultivating, and otherwise improving the trees and shrubbery on the place. Such adjustments were a matter of affirmative proof to be introduced by the Commissioner. Instead of so doing, the Commissioner contented himself with general cross examination of the taxpayer. We are unable to determine from the record any basis of adjustment other than that set forth in our decision. There are intimations in the record that deductions as above mentioned were claimed by the taxpayer and allowed by the Commissioner in earlier years. But this Board cannot make findings of fact in definite amounts upon intimations. The taxpayer and the Commissioner must be expected to plead and to establish the facts upon which *2443 they rely in support of their respective positions. In the absence of proof, therefore, the Board can only base its decision the record, determining the ultimate issue in accordance with the evidence before it.