*1127 The petitioner organized a corporation exclusively for charitable, etc., purposes, to which he made all of the contributions received by it during the taxable year, with one minor exception. The corporation made some donations in that year to several charitable organizations, but donated the principal part of its receipts to relatives of the petitioner and an old family employee. Held, the corporation was not operated during the taxable year exclusively for charitable purposes within the meaning of section 23(n)(2), Revenue Act of 1928.
*239 The Commissioner determined a deficiency of $245.46 for the calendar year 1931. The petitioner assigns as error the disallowance by the Commissioner of a deduction of $2,907.57 claimed as charitable contributions.
FINDINGS OF FACT.
The petitioner is an individual residing in Philadelphia. He incorporated the Keystone Foundation, Inc., under the laws of Delaware in March 1931. The petitioner, his wife, and his stenographer were the incorporators, the members, the officers, and the trustees of the corporation. *1128 It was organized exclusively for religious, charitable, scientific, literary, and educational purposes and for the prevention of cruelty to children and animals. It had no net earnings during 1931. It had no shareholders. No part of its net earnings inured to the benefit of any private shareholder or individual during 1931.
The contributions received by this corporation in 1931 consisted of $3,635 received from the petitioner and $25 received from his wife. The corporation expended the following amounts in 1931 for the purposes shown:
| Incorporation expense | $164.95 |
| Fee for filing annual report | 2.00 |
| Office rent | 200.00 |
| Donations: | |
| United Campaign of Philadelphia | 200.00 |
| Philadelphia Health Council & Tuberculosis Committee | 5.00 |
| American Red Cross | 5.00 |
| Needlework Guild | 10.00 |
| Parent's Council of Philadelphia | 10.00 |
| St. Luke's & Children's Hospital Campaign Fund | 50.00 |
| Salvation Army | 30.00 |
| Rachel W. DuBois (board and maintenance) | 1,800.00 |
| Mary M. Townsend (board and maintenance) | 360.00 |
| Fannie Martin (nursing and hospital) | 551.55 |
*240 Rachel W. DuBois is the widow of the petitioner's brother. mary M. Townsend was a cousin of*1129 the petitioner's mother. Fannie martin was for many years a maid and later a companion for the petitioner's mother. The petitioner's mother was dead at the time these gifts were made.
The petitioner on his return for 1931 claimed a deduction of $2,907.57 representing his contributions to Keystone Foundation, Inc. This deduction did not exceed 15 percent of the petitioner's net income computed without the benefit of section 23(n) of the Revenue Act of 1928. The Commissioner disallowed the deduction.
Keystone Foundation, Inc., was not operated, during 1931, exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals.
OPINION.
MURDOCK: The only question for decision in this case is whether or not the Keystone Foundation, Inc., was operated during 1931 exclusively for charitable purposes within the meaning of section 23(n)(2) of the Revenue Act of 1928. The petitioner claims that it was and, therefore, his contributions to it are deductible, subject to the 15 percent limitation. But the Commissioner has held that it was not operated exclusively for such purposes and contends that it was operated*1130 principally for private purposes which were personal to the petitioner.
The petitioner testified in regard to his reasons for organizing the corporation and his plans for widening the field of its operations. Inability to clearly establish the fact that contributions to it would be deductible under section 23(n) was his reason for not soliciting funds for the corporation from others. He contends, however, that during 1931 it was operated exclusively for charitable purposes. despite the fact that he contributed practically all of the funds and two of his relatives and an old family employee received most of the benefits from those funds. He said that he chose these three individuals because he knew them and knew that they were worthy of assistance.
If the corporation was operated even partly for purposes that were private or personal to the petitioner the contributions are not deductible. Charitable contributions to be deductible must be for public, as opposed to private, charity, i.e., "free from stain or taint of every consideration that is personal, private, or selfish." Cf. *1131 ; ; . Direct gifts by the petitioner to the seven organizations, to which Keystone Foundation, Inc., contributed a total of $310, would have been *241 deductible by the petitioner, but direct gifts by him to the three individuals to whom or for whose benefit the Keystone Foundation, Inc., paid $2,711.55 would not have been deductible by him. The petitioner dominated and controlled the corporation and its operations. The evidence indicates that it was operated in 1931 partly to permit him to contribute to the three individuals through the corporation in the hope that in this way contributions, otherwise not deductible on his income tax return, would be deductible. This is the view the Commissioner has taken and the evidence relating to the operations for this particular year does not show that he erred. The situation in other years is another matter.
Decision will be entered for the respondent.