*259OPINION.
SteRnhagen:The primary question is whether the dividends on petitioner’s stock during the years in question are part of his income notwithstanding the fact that, because of his instruction to the corporation, they were not received by him but paid directly to his son Stewart. The question is essentially the same as that involved in Samuel V. Woods, 5 B. T. A. 413; Fred W. Warner, 5 B. T. A. 963; Providence & Worcester R. R. Co., 5 B. T. A. 1186, and in Rensselaer & Saratoga R. R. Co. v. Irwin, 239 Fed. 739; affd. 249 Fed. 726; certiorari denied 246 U. S. 671.
The petitioner was himself the stockholder and continued to own the stock. Notwithstanding the request to do so, he refused to give it to his son because he wanted to control its disposition, an important attribute of ownership. His direct purpose was to augment his son’s income for his part in the success of the corporation — not to make the son a stockholder, but to let him benefit, through the petitioner, by its earnings. The son received no dividend, because between him and the corporation there was no such relation as entitled him to a dividend. Only stockholders were entitled to dividends, and even although the amount was the same, his right to it was not derived from any of the considerations which apply to stockholders, but from a separate agreement with one other than the corporation. As between him and the corporation he had not even that inchoate interest in earnings which a stockholder has before dividend declared. All of the attributes and incidents of a stockholder were continued in the petitioner.
The significance and importance of this is clear when it is remembered that the individual stockholder taxpayer is freed from normal tax upon his dividends. This is upon the theory that, after all, the incidence of the corporation income tax is ultimately upon the stockholders, and Congress has to this extent lightened their tax burden. But it is hardly arguable that this legislative intent carried beyond the stockholders to anyone who might be collaterally or indirectly interested in the corporation’s earnings. It is the stockholder who gets the dividend and he alone who may have the normal-tax credit.
*260The petitioner points to Louisiana law by which the usufruct of property may be legally held by one other than the owner. Be that as it may, it does not change the solution of the problem. It may be that the son has acquired an independent right against the corporation (questionable, as will be seen from the adjustment which was made when the stock passed by death to another), yet this was only because the stockholder by anticipation had enjoyed and exercised his right of ownership by transferring it. He was, in effect, postdating his assignment to the several times when he was to receive dividends. As in the Rensselaer case, supra, the single contract was merely a convenience by which the amount of the dividend went across lots instead of taking the highway.
The adjustment when petitioner’s wife died, to which reference has been made, is significant. By Louisiana community property law the wife owned one-half the stock upon which the dividends in question were paid. Upon her death such stock descended to her children. At that time it was recognized by all those interested that the ownership of the stock carried with it the dividends; and thereupon, since so much of the amount would no longer be covered by petitioner's order to the corporation, it was brought about that the salary of Stewart LeBlanc should be increased. Indeed, the question was raised whether such, dividends on this stock as had already gone to Stewart were properly collatable, but this question was settled without adjudication and gives petitioner no support.
We hold that the amount of the dividends upon petitioner’s stock paid in the years in question is properly within his gross income.
Petitioner urges in that event that the amount is a proper deduction as a business expense. He was engaged in numerous ventures directly and incidentally related to shipping. He was not merely an inactive stoi ^holder in Mobile Liners, Inc. He and Sanders used this means of advancing and holding their personal interests in representing foreign steamship lines. Stewart LeBlanc was an important factor of success. He was in favor at the home office in London. He was threatening to quit, and the loss of his services might have been serious. To protect his own business position, the petitioner acquiesced in his demand for greater compensation and, for the reasons already set forth, did it by this means without consulting Sanders. The correspondence in evidence shows that it was done on a business basis to retain Stewart’s services and hold the Mobile steamship ' business. This is in our opinion a deductible expense. See Harold Motenson, 3 B. T. A. 300.
As to the overassessment for 1918, the petition is dismissed for want of jurisdiction. Cornelius Cotton Mills, 4 B. T. A. 255; John F. Cook, 4 B. T. A. 916; Florence M. Smith, Executrix, 5 B. T. A. 225.
Judgment will he entered on 15 days' notice, wnd&r Rule 50.