*2460 On the evidence, held that certain jewelry stolen in 1924 was the personal property of the petitioner; also, the amount of the deduction to which the petitioner is entitled on account of such loss determined.
*166 This is a proceeding for the redetermination of a deficiency in income tax for the year 1924, in the amount of $16,019.10. The *167 sole issue is whether or not the petitioner is entitled to a deduction from gross income on account of the loss of certain jewelry alleged to have been stolen during the taxable year.
FINDINGS OF FACT.
The petitioner is an individual, residing at Chattanooga, Tenn. About the year 1900 he began to purchase fine jewelry, including particularly gems and precious stones, such as diamonds, pearls, rubies, sapphires, and emeralds. The petitioner devoted considerable time to the study of gems and the designing of fine jewelry, and, during the period from about 1900 down to the taxable year, invested large sums of money in such articles. These purchases were made primarily for two reasons; first, as a*2461 safe investment for surplus funds with the expectation of a substantial increase in value, and, second, to provide a valuable and useful collection of jewels to be bequeathed to his son and intended to remain indefinitely in his family.
On February 4, 1924, the petitioner and his wife were occupying a small cottage residence in Miami, Fla. About 9 o'clock on the night of that date the residence was burglarized and, among other things, certain articles of jewelry belonging to the petitioner, purchased as above indicated, were stolen. The stolen jewelry has never been recovered, nor its loss compensated for by insurance or otherwise.
The jewelry in question was insured against loss by theft or fire while located in Chattanooga, Tenn., but the insurance did not apply elsewhere. The petitioner, and not his wife, paid for and carried this insurance, and the petitioner also returned and paid taxes on the jewelry as his personal property. The petitioner's wife was permitted to use the jewelry at her pleasure and without restriction. On the night of the burglary she was wearing some of the most valuable pieces of her person.
The petitioner's wife was independently wealthy in*2462 her own right, and able to purchase with her own funds such jewelry as she desired. The petitioner also gave to his wife certain jewelry which is not involved in this proceeding.
Of the jewelry stolen in Miami, Fla., on the night of February 4, 1924, a portion was the personal property of the petitioner's wife. This jewelry was acquired by her between the years 1888 and 1918, both inclusive, and for its loss she claimed a deduction in her individual return for said year in the amount of $1,840, which was allowed by the respondent and is not in controversy here.
The following articles of jewelry, the personal property of the petitioner, together with the cost or March 1, 1913, value thereof, *168 were included in the jewelry stolen under the circumstances above set out:
| Cost, or Mar. 1, | |
| 1913, value | |
| (1) Platinum or gold pin, pearls and diamonds | $4,000.00 |
| (2) Platinum bar pin, large sapphire, diamonds | 28,000.00 |
| (4) Ring, 3 large and several small diamonds | 2,500.00 |
| (5) Ring, rubies, and diamonds | 1,000.00 |
| (6) Pendant, pearls and diamonds, containing | |
| 2 miniatures on ivory | 2,000.00 |
| (8) Platinum wrist watch and bracelet, | |
| sapphires and diamonds | 2,000.00 |
| Emerald and diamond brooch | 4,000.00 |
| Total proved value | 43,500.00 |
| Amount allowed by commissioner | 1,600.00 |
| Balance | 41,900.00 |
*2463 The cost relates to assets acquired subsequent to March 1, 1913, and the March 1, 1913, value relates to assets acquired prior to that date, that value being greater than cost.
The petitioner claimed a deduction from income in his return for 1924 on account of the loss of the numbered articles above described in the amount of $42,650, and at the hearing amended his petition to include in addition thereto an emerald and diamond brooch at a value of $4,500, the cost of which was established by the evidence at $4,000. The deduction claimed in the petitioner's return was allowed by the respondent in the amount of $1,600 and disallowed in the amount of $41,050.
OPINION.
TRAMMELL: The sole question in this case is whether or not the petitioner is entitled to a deduction from income for 1924 on account of the loss by theft of the jewelry described in our findings of fact above. The respondent disallowed the claimed deduction on the ground that the jewelry was purchased by the petitioner and was given by him to his wife, and hence was her property. The petitioner alleges, and so testified unequivocally, that he purchased the jewelry partly as a sound investment, but also with*2464 the intention of leaving it to his son and having it remain indefinitely in his family. While the petitioner admits that his wife had the unrestricted use of the jewelry at any times she desired, he denies most emphatically that he gave it to her or to anyone else.
A gift is a valid transfer of property from one to another without consideration or compensation therefor. The essential elements of a gift are an intention to give a transfer of title or delivery, and an acceptance by the donee. . It is elemental to say that delivery alone is not sufficient to constitute a valid gift. There must also be the present intention that the property *169 delivered shall be the property of the donee. .
The respondent urges in effect that the intention of the petitioner to give the jewelry in question to his wife may be inferred from the character of the articles and the common practices and experiences of men in similar situations; in other words, that from the circumstances we must infer that the petitioner intended the jewelry as gifts to his wife, notwithstanding his positive*2465 testimony to the contrary. The contention of the respondent is, in our opinion, sufficiently refuted by the very definite testimony of the petitioner, which testimony stands unimpeached and uncontroverted. Certainly we can not say that the petitioner's testimony is incredible, or that he is unworthy of belief. On the contrary, the petitioner has, we think, given a reasonably satisfactory explanation of what might otherwise be regarded as an unusual situation.
We have found that the jewelry involved here was the personal property of the petitioner. Accordingly, in redetermining the deficiency, an additional deduction will be allowed in the amount of $41,900.
Judgment will be entered under Rule 50.