Kelly v. Commissioner

*297OPINION.

Steenhagen :

The foregoing findings of fact are as submitted by petitioner, but, as in the companion case of Bruno O. A. de Paoli, Executor, 8 B. T. A. 294, the petitioner fails for the reason that on the cash basis he or the partnership may not deduct an unpaid liability. Petitioner here has not proved the basis of his or the partnership’s return or the method of his or its accounts, although in his petition he alleges that he kept no books. See John A. Brander, 3 B. T. A. 231. This failure of proof, as in the companion case, is not a mere oversight, because the question was squarely suggested at the trial.

It should be added, in view of the petitioner’s brief, that counsel for the petitioners have expressly maintained throughout these proceedings that the two employees were not partners and were there*298fore not participating in the profits as such. The question, therefore, is not whether the two partners can be charged with having received the income of the partnership, but whether the partnership is entitled to the deduction in 1920 and 1921 for compensation to employees not paid until 1922. The determination is sustained.

Judgment will be entered on 16 days’ notice, u/nder Rule 60.

Considered by LaNsdok and AeuNdell.