Silcox v. Commissioner

*749OPINION.

Trammell:

The question to be decided here is whether the petitioner correctly reported his income upon a calendar year basis or whether, as determined by the respondent, he should have reported it upon a fiscal year basis.

We think from all the evidence that the books of the cotton business operated by the partnership of which the petitioner was a member and by the petitioner were closed upon a fiscal year basis and that that business had established an accounting system upon a fiscal year basis. This is indicated by the fact that the books were ruled dowm on August 31 of each year and the determination of profits was arrived at on that basis.

During the taxable year the petitioner operated this business as an individual from September 1, 1920, to December 31, 1920. From September, 1919, to December 31,1919, the business was also operated by the petitioner as an individual. The only books kept by the petitioner were on the fiscal year basis. Income of the petitioner, however, from interest on mortgages and a fee for settling an estate were not entered in any book. The mere fact that certain income from a source other than petitioner’s principal business was not recorded in his books is not sufficient reason for holding that a different basis should be used in reporting that income. We can not hold that the petitioner did not keep any books because the fact is that he did. The authorities cited by the petitioner with respect to individual members of partnerships reporting their income upon one basis when the partnership maintained its books on another basis, are not in point. Here the petitioner, during a substantial part of the taxable year, operated the business as an individual and kept his books upon a fiscal year basis. An individual can not report his income both upon a fiscal year basis and a calendar year basis. It must be one or the other. Since the only books kept by the petitioner were upon a fiscal year basis, all of his income should have been reported upon that basis.

Reviewed by the Board.

Judgment will be entered under Buie 50.