*969OPINION.
Sternhagen :The petitioners claim a deduction of the amount paid in the taxable year to their attorney in the litigation to construe the will of Cornelius Vanderbilt and determine to whom belonged the accumulated excess corpus and income in which they claimed through the decedent Alfred as a residuary legatee. In re Vanderbilt’s Estate, 134 Misc. Rep. 574; 236 N. Y. S. 316; In re Vanderbilt’s Will, 229 App. Div. 574; 243 N. Y. S. 165. They can succeed only if they *970bring this expenditure within the deduction described in section 23 (a), [Revenue Act of 1928, as one of “the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” The issue, made clear from the time of the notice of deficiency through the trial, has been whether the petitioners were in fact carrying on any trade or business to which this attorney’s fee would be properly regarded as an incident. The record, however, gives not the slightest evidence of what these trusts did that might be called carrying on trade or business. It appears only that by the will of Alfred G. Vanderbilt his executors were appointed trustees of these two trusts and that they had power to invest and reinvest the principal, to collect the income, pay taxes and expenses, and distribute to their separate beneficiaries in the prescribed manner. How they exercised these powers does not appear except as to the distributions, and according to this record they may have been mere passive conservators of a well invested trust fund.
Petitioners cite John H. Watson, Jr., et al., Trustees, 35 B. T. A. 706, as supporting their position and as holding generally that the management of any testamentary trust of a residuary estate constitutes a carrying on of business within the statute. That decision, however, can not be given such a broad scope. The case apparently arose originally, not upon the Commissioner’s determination that the
trust was not carrying on trade or business, but upon his determination that, although it was carrying on trade or business, a portion of its expenses was not deductible because allocable to tax-exempt income. After the hearing, however, the respondent in his brief broadened his position to contend that the petitioner was entitled to no deduction whatever because it was not carrying on a trade or business, and the Board held that the broadened position had no merit. Whether it would have had merit if the petitioner had had an opportunity to litigate it and had failed in his proof would be a different question, and that is the question here. It is a question of fact. Conceivably, testamentary trusts such as these petitioners may be engaged in business of one kind or another, and no less conceivably they may refrain from engaging in business. The statute applies its provisions similarly to trusts and to individuals, and it can not be dogmatically said as to a trust, even though it be one of long standing, that an attorney’s fee reasonably and necessarily paid by it is deductible as an expense of carrying on business any more than it can be said as to an individual. Dorr v. United States, 18 Fed. Supp. 92; Morse v. Helvering, 85 Fed. (2d) 262; Monell v. Helvering, 70 Fed. (2d) 631; Ames v. Commissioner, 49 Fed. (2d) 853.
The respondent’s argument also makes the point that, even though the trusts were to be regarded as carrying on a trade or business, *971bin's fee was not a business expense deductible to reduce gross income but was either (or both)' an administration expense of the decedent estate of Alfred G. Vanderbilt or a nondeductible capital expenditure because incident only to the enlargement of the corpus-of the trust fund. He suggests also that the fee may not be- deducted by these petitioning trusts because it was actually paid by the executors of the decedent’s estate and not by the trustees, who were parties to the surrogate’s proceeding involving Cornelius Vanderbilt’s will only because they had become the residuary legatees under the will of their father, one of Cornelius’ sons and a residuary legatee. These questions, however, escape decision in view of the principal determination that the fee has not been shown in fact to be an expense of “carrying on any trade or business” by the taxpayers, and the Commissioner’s determination is sustained.
Reviewed by the Board.
Judgment mill be entered for the respondent.
Tyson dissents.