Bruner v. Commissioner

Delbert D. Bruner and Hermantina Bruner, Petitioners, v. Commissioner of Internal Revenue, Respondent. Jewel T. Bruner, Petitioner, v. Commissioner of Internal Revenue, Respondent Bruner v. Commissioner Docket Nos. 92074, 92078 United States Tax Court 39 T.C. 534; 1962 U.S. Tax Ct. LEXIS 10; December 13, 1962, Filed *10 Decision will be entered for the respondent in Docket No. 92074. Decision will be entered for the petitioner in Docket No. 92078. Held, petitioner Jewel T. Bruner has established she furnished more than one-half of the total support of her son Tom during the taxable years involved. Delbert D. Bruner, pro se, in Docket No. 92074. Robert E. Davis, Esq., and Wentworth T. Durant, Esq., for the petitioner in Docket No. 92078. James F. Hart, Esq., for the respondent. Black, Judge. BLACK *534 Deficiencies have been determined in the income tax of petitioners in the amounts and for the years set forth as follows: Docket Petitioner Year Deficiency No. 92074 Delbert D. Bruner and Hermantina Bruner [1958] $ 132 [132] 92078 Jewel T. Bruner [144] In their 1958 and 1959 joint income tax returns petitioners Delbert D. and Hermantina Bruner claimed a dependency exemption for Tom Bruner, Delbert's son. Upon audit of the income tax returns of Delbert and Hermantina for the years 1958 and 1959, respondent disallowed the dependency exemption claimed by them for Tom. The notice of deficiency contained the following explanation: *11 (a) The deduction claimed by you for one dependent, Tom Bruner, on your income tax return for the taxable year ended December 31, 1958 is disallowed for lack of evidence that you furnished more than one-half of his support in said year and that the exemption for him is allowable on your return under provisions of the Internal Revenue Code. Your taxable income has been increased accordingly. A similar explanation was given for the year 1959. On her returns for the years 1958 and 1959 Jewel T. Bruner claimed a dependency exemption for her son Tom. Upon audit of Jewel's income tax returns for the years 1958 and 1959, respondent disallowed the dependency exemption claimed by her with the following explanation in the notice of deficiency: (a) The deduction claimed by you for one dependent, Tom Bruner, on your income tax return for the taxable year ended December 31, 1958 is disallowed for lack of evidence that you furnished more than one-half of his support in said year. Your taxable income has been increased accordingly. A similar explanation was given for the year 1959. *535 The question in this case concerns whether petitioners Delbert and Hermantina, or petitioner Jewel, *12 or none of them, furnished more than one-half of the support of Tom during the taxable years 1958 and 1959. That is the only issue in these consolidated proceedings. FINDINGS OF FACT. Stipulations of facts, together with exhibits attached thereto, were filed by the parties and are incorporated herein by this reference. Delbert and Hermantina are husband and wife and reside in Dallas, Texas. They filed their joint income tax returns for the taxable years 1958 and 1959 with the district director of internal revenue, Dallas. Jewel resides in Dallas and filed her income tax returns for the years 1958 and 1959 with the district director of internal revenue, Dallas. Delbert and Jewel were divorced on April 11, 1956. The divorce decree awarded custody of their three children, Delberta, John, and Tom, to Jewel. At the time of the divorce the children, Delberta, John, and Tom were 20, 16, and 12 years of age, respectively. The divorce decree ordered the father, Delbert, to pay $ 50 per month, payable semimonthly, for the support of each child under the age of 18 years. In 1958 and 1959, Tom resided with his mother at 7526 Kaywood Drive, Dallas. He was a full-time public high school student*13 during these years. During said years legal title to the home on Kaywood Drive was in Delbert and Jewel. Beneficial ownership of the residence was solely in Jewel by virtue of the decree of divorce which provided, inter alia: It is further ordered, adjudged and decreed by the Court that the plaintiff, Jewel Bruner, take as her part of the community property: The 1951 model 2-door Chevrolet automobile, subject to the indebtedness; all the household furniture, furnishings, fixtures and piano in their home located at 7526 Kaywood Drive, Dallas, Texas, subject to the indebtedness against such furniture; and that a trust be and is hereby imposed on their home located at 7526 Kaywood Drive, Dallas, Texas, for plaintiff's use and benefit until said youngest child reaches the age of eighteen years or plaintiff should remarry, whichever occurs first; and upon the happening of either event, such homestead shall be sold and the proceeds divided between plaintiff and defendant in the following manner: Plaintiff shall be entitled to be reimbursed for the amount by which she has reduced the indebtedness against said homestead during the period from this date until the date of sale, and the*14 net proceeds of the sale to be divided equally between plaintiff and defendant; plaintiff to make payments on the house, pay taxes, insurance and keep house in reasonable repair. The house was purchased by Delbert and Jewel in 1947 for $ 8,000 and payments were made from community funds until the divorce. The fair value of the lodging furnished Tom by Jewel in 1958 and 1959 was $ 600 per year. Delbert made child support payments of $ 625 and $ 575 in 1958 and 1959, respectively, for the support of Tom. In addition to the *536 support payments, Delbert furnished Tom with gifts and meals having a total value in each taxable year of $ 35. During the year 1958 Tom earned $ 350.35. Of that amount, $ 33 was withheld by his employer and refunded in 1959. Of the amount which he had available for spending after deduction of withholding taxes, he spent $ 160 for items which are properly classed as support items. During the calendar year 1959 Tom earned $ 937. Of that amount, $ 150 was withheld by his employer and refunded in 1960. Of the amount remaining of his earnings in 1959 after deduction of the withholding taxes, plus the $ 33 refunded to him in 1959 which had been deducted*15 in 1958 as withholding taxes, Tom spent $ 460 for items which should be classed as support items. In addition to furnishing Tom with lodging having a fair value of $ 600 per year, petitioner Jewel incurred and paid the following expenses in behalf of Tom: [1959] Food $ 336.00 $ 360.00 Cleaning and laundry 100.00 100.00 Transportation 100.00 100.00 Medical expenses 45.50 75.00 Church contributions 86.66 86.66 Entertainment 40.00 40.00 Haircuts 30.00 30.00 Magazines and other literature 15.00 15.00 Clothing 200.00 200.00 Hospitalization insurance 40.00 55.00 Miscellaneous items 25.00 25.00 Drug prescriptions and sundries 0.00 75.00 Total 1,018.16 1,161.66 Less support payments received from Delbert 625.00 575.00 393.16 586.66 Lodging 600.00 600.00 Total support of Tom furnished by Jewel 993.16 1,186.66 The total cost of support of Tom in each year was as follows: [1959] Furnished by Delbert $ 660.00 $ 610.00 Furnished by Tom 160.00 460.00 Furnished by Jewel 993.16 1,186.66 1,813.16 2,256.66 Jewel furnished over one-half of the support of Tom in each of the years 1958 and 1959. OPINION. Petitioners*16 Delbert and Hermantina contend they are entitled to the dependency exemption for Tom for 1958 and 1959 *537 because, in the community property settlement at divorce, Jewel promised that Delbert could claim the children by a multiple-support agreement. Delbert contends Jewel violated the terms of the community property settlement approved by the divorce court. However, we are not bound by that court's determination, , affirmed per curiam (C.A. 2, 1952), certiorari denied . In any event, a multiple-support agreement could not be made applicable as to Delbert since we have found that Jewel contributed over one-half of Tom's support and the statute expressly states that a dependency cannot be claimed by any other taxpayer in this situation. 1 *17 The decision in the instant case depends entirely on the amount of support actually contributed by each parent in relation to the total support received by the claimed dependent in each of the years in issue. Our findings of fact show that the amount of support furnished Tom in 1958 and 1959 totaled $ 1,813.16 and $ 2,256.66, respectively. Since the contributions of Delbert and Hermantina were not more than $ 660 in 1958 and $ 610 in 1959, they have failed to prove they furnished over one-half of the total support received by Tom. We have determined that Jewel furnished over one-half of the total support provided Tom. In reaching this conclusion we determined that she is entitled to claim the entire fair value of the lodging furnished Tom instead of one-half thereof as Delbert and respondent contend. The divorce decree awarded possession of the residence to her as "her part of the community property." Legal title remained in Delbert and Jewel as tenants in common. The divorce decree ordered that the house be sold after the youngest child reached 18 or Jewel remarried and the proceeds used to reimburse Jewel for the amount by which she reduced the indebtedness against the house. *18 The decree also provided that the balance of the proceeds from the sale of the house be equally divided between Delbert and Jewel. However, the decree imposed the trust on the property for Jewel's "use and benefit." In essence, Jewel exchanged her share in all the undivided community property for certain specific items of property and the right to use and possession of the house for the time limits set by the divorce court. Lodging support for Tom in 1958 and 1959 does not depend on the respective legal interests owned by Jewel and Delbert in the residence. It is based rather on fair value of the lodging furnished. Jewel had the sole right to possession *538 and occupancy in the years in issue and accordingly the lodging furnished Tom in that residence was furnished by her. We have accepted and have not changed several of the items claimed by Jewel as to her expenses for the support of Tom. Other items which she claimed at the hearing we think are too high and unrealistic and we have made findings as to those items, applying the so-called Cohan rule based on (C.A. 2, 1930). Decision will be entered*19 for the respondent in Docket No. 92074. Decision will be entered for the petitioner in Docket No. 92078. Footnotes 1. Internal Revenue Code of 1954: SEC. 152. DEPENDENT DEFINED. (c) Multiple Support Agreements. -- For purposes of subsection (a), over half of the support of an individual for a calendar year shall be treated as received from the taxpayer if -- (1) no one person contributed over half of such support;↩