dissenting: As pointed out in Judge Sterrett’s dissenting opinion all amounts otherwise deductible, except personal exemptions, are not allowed as deductions if they are “allocable to or chargeable against amounts excluded” from the taxpayer’s income under section 911. The parties agree that petitioner’s income earned while in Australia is exempt from taxation under section 911.
The deduction for moving expenses is provided in section 217, which is a part of part YII of subchapter B, chapter 1, subtitle A of the Code. By the very terms of section 217, moving expenses are deductible only if paid or incurred “in connection with the commencement of work by the taxpayer as an employee at a new principal place of work.” It seems clear that to qualify for the moving expense deduction at all, taxpayer’s expenses here must be allocable to his new employment in Australia, the income from which was excludable from petitioner’s taxable income. The entire tenor of section 217 is employee-business oriented. Hence, in my opinion, the deduction is not allowable by virtue of section 911.
The fact that moving expenses may have been treated as personal living expenses in cases not involving sections 217 and 911 would seem to have little significance in determining whether the deduction allowed by section 217 is allocable to taxpayer’s excludable income. In my opinion this expense which would otherwise be allowable to petitioner, is allocable to his income earned from his new employment in Australia which is excludable from United States tax, and must be disallowed under section 911.
I would like to note in passing that while the deductions allowed by section 217 are specifically made deductible from gross income for purposes of determining adjusted gross income under section 62(8) (despite the exception contained in the parenthetical clause in section 62(1) relative to deductions allowable by part YII of the subchapter of which section 217 is a part), the deduction for moving expenses allowed by section 217 also appears to be deductible in computing taxable income under section 63 (a) by virtue of section 211. This seeming inconsistency simply emphasizes to me that the characterization of moving expenses as personal living expenses in prior cases should not be decisive of the deductibility of the expenses involved in this case.
Baum, Atkins, and Stereett, JJ., agree with this dissent.