District & Sec. Trust Co. v. Commissioner

DISTRICT & SECURITY TRUST CO. ET AL., EXECUTORS, ESTATE OF EDWARD C. VAN HUSAN, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. District & Sec. Trust Co. v. Commissioner Docket No. 27008. United States Board of Tax Appeals 20 B.T.A. 136; 1930 BTA LEXIS 2192; June 25, 1930, Promulgated *2192 Under the laws of the State of Michigan, where a husband receives the income from real estate owned by the husband and wife as tenants by the entirety, held that the entire income belongs to the husband. James K. Watkins, Esq., for the petitioners. Ralph S. Scott, Esq., and Edwin N. Neiss, Esq., for the respondent. MCMAHON *136 In this proceeding the petitioners seek a redetermination of the income-tax liability of Edward C. Van Husan, deceased, for the calendar years 1922 and 1923, for which years the respondent has determined deficiencies in the amount of $558.07 and $644.43, respectively. The only issue involved is whether income, received by a husband from real estate owned by him and his wife in the State of Michigan as tenants by the entirety, is taxable to the husband or whether one-half of the amount is taxable to the wife. FINDINGS OF FACT. The District & Security Trust Co., Kate M. Van Husan and Harold M. Van Husan are the duly qualified and acting executors of the estate of Edward C. Van Husan, deceased, and as such have been substituted in place of the decedent in this proceeding. The following facts have been stipulated: *2193 The decedent, during the years 1922 and 1923, resided with his wife, Kate M. Van Husan, in Detroit, Mich., and the decedent and his wife filed separate Federal income-tax returns for the years involved. The decedent and his wife were, during the years 1922 and 1923, the owners as tenants by the entirety of the certain real estate in Detroit, Mich. (the description of which we omit). The taxable net income from this real estate was received in the amounts of $11,084.89 and $13,219.34 for the years 1922 and 1923, respectively, and the decedent and his wife each returned one-half of the income on the separate return of each. The respondent considered all of such income to be taxable to the decedent, and the sole issue in this cause is whether the full amount of such income is taxable to the decedent, or whether it is taxable one-half to the decedent and one-half to his wife. *137 OPINION. MCMAHON: The sole question before us is whether or not, under the laws of Michigan, the income from real property held by husband and wife as tenants by the entirety belongs to the husband. It has been held by the courts of the State of Michigan that a tenancy by the entirety*2194 is a creation of the common law and has not been abolished or affected by the "Married Woman's Act." ; ; ; ; ; . In the Morrill case, the Supreme Court of Michigan, in holding that the husband has, under a tenancy by the entirety, the full control and disposition of the profits arising out of land and that the wife could not compel the husband to account for such profits, stated in part: Two questions are raised by this appeal: First, Has the wife a right to a share of the crops growing on lands held by her and her husband as tenants by the entirety? If the wife has a right to compel her husband to account for a share of the crops on land held by entireties when they are living separate, as in this case, she cannot be denied that right when they are living together. If she has such a right, it becomes important to determine where she obtained it. The common law certainly gave her no such right; for, according to its principles, the exclusive right to dispose*2195 of the crops and use the proceeds as he saw fit belonged to the husband. See ; ; . It follows, therefore, that if the wife has that right now she obtained it as the result of some statute of this state. The only statute which it can be claimed has any bearing on this subject is our married woman's act. Section 8690, Comp. Laws 1897. I think it must be conceded that the decisions of this court have determined that this statute has no application to estates by entirety. See ; ; ; ; ; *2196 . Accordingly, since the husband has the full control and disposition of the income from the land held as a tenant by the entirety, it follows that the entire amount of such income is taxable to him. Reviewed by the Board. Judgment will be entered for the respondent.