Waters v. Commissioner

OppeR, J.,

concurring: This case brings to light another of the many difficult paradoxes consequent upon the attempt to refashion conventional rules of tax law to fit eccentric community property relationships. As I understand if, the Tax Court holds that only half of the property involved was ever acquired by the estate. Nevertheless, it permits that taxpayer to deduct depreciation and losses in full and thus to obtain the tax benefit of deductions for an economic detriment which it can not suffer and with respect to property which it does not own.

Inferentially, the logical result will be to deny those deductions to the widow, notwithstanding that they may represent a loss to her, with respect to her property. Depreciation, like other losses, is a perquisite of the owner of property accorded for the purpose of compensating him. It does not inure to the benefit of a taxpayer who may lose nothing. Weiss v. Weiner, 279 U. S. 333. And, unlike Commissioner v. Larson, this proceeding deals with a California statute which grants to the executor only possession of the community property, as distinguished from Washington, where “title to the personal property vests in the executor or administrator.”

If the conclusions so indicated are sound, the issues decided by the prevailing opinion might never arise. For the basis to the estate of property which still belongs to the widow would be meaningless doubletalk. However, I am in accord with the result reached because, as the case is presented by the parties, these questions are not even suggested ; and I think a taxpayer is entitled to be put on notice of an adverse position it will be called upon to meet. See Helvering v. Wood, 309 U. S. 344.