*3844 A contribution to a cemetery not operated for gain is not deductible by an individual from gross income under the provisions of section 214(a)(11) of the Revenue Act of 1921.
*193 This proceeding involves the redetermination of a deficiency in income tax for the year 1921 in the amount of $7,655.38. Petitioner assigns the following errors: (1) That respondent erred in holding that income received by the taxpayer from the estate of Joseph W. Craig, deceased, is taxable to him instead of the fiduciary; (2) the respondent erred in using as a basis of depreciation value of buildings which was less than their fair value on March 1, 1913; and (3) that respondent erred in his refusal to allow as a deduction, $6,667, given to Sewickley Cemetery by petitioner in the year 1921, and which was claimed by petitioner in his income-tax return for that year as a proper deduction. The facts were stipulated and our findings of fact conform to the stipulation of the parties.
FINDINGS OF FACT.
Petitioner is a citizen of the United States, residing at 849 Bank*3845 Street, Sewickley, Pa. The facts relating to the first issue, namely, that respondent erred in holding that income received by the taxpayer from the estate of Joseph W. Craig for the year 1921, was taxable to him instead of the estate, have heretofore been considered by the Board and are fully set forth in the findings of fact in George L. Craig et al. v. Commissioner,7 B.T.A. 504">7 B.T.A. 504. The facts found by the Board in that appeal with reference to this issue are made a part of these findings of fact as fully as if set forth in detail herein. The conditions existing in 1921, with reference to such income, were identical with those existing in 1918, 1919 and 1920.
In computing the income from the real estate owned by the petitioner as devisee of Joseph W. Craig, the respondent computed depreciation on buildings on said real estate based upon a value on March 1, 1913, as follows:
| Character of buildings | Value on Mar. 1, | Rate of |
| 1913 | Depreciation | |
| Per cent | ||
| Brick rental properties | $246,800 | 2 |
| Brick warehouse | 25,000 | 1 |
| Frame rental properties | 14,350 | 3 |
*194 Whereas, the correct basis for March 1, 1913, value of buildings*3846 for depreciation should be:
| Brick rental properties | $350,042.50 |
| Brick warehouse | 36,080.00 |
| Frame rental properties | 32,692.00 |
Joseph W. Craig, a citizen of the United States, a resident of the Borough of Sewickley, County of Allegheny, Commonwealth of Pennsylvania, died on March 5, 1912, having on June 20, 1911, made his last will and testament. The said last will and testament of Joseph W. Craig was admitted to probate in the Orphans' Court of the County of Allegheny, Commonwealth of Pennsylvania, on the 15th day of March, 1912, and Edwin S. Craig and George L. Craig were appointed executors of the said last will and testament, having been named in the will as said executors.
By the terms of the will of Joseph W. Craig, all of his residuary estate was devised and bequeathed to his four brothers and two sisters, share and share alike, one of whom is the petitioner herein.
The property of Joseph W. Craig included, in addition to personal property, some thirty separate properties varying widely in character, use and value.
The fair value on March 1, 1913, of the lands and buildings owned by Joseph W. Craig at the time of his death, was as follows:
| Location of property | Value of | Value of | Total value |
| land | buildings | ||
| 1319 Pennsylvania Avenue, Pittsburgh 1 | $8,820.00 | $1,112.50 | $9,932.50 |
| 2421 Pennsylvania Avenue, Pittsburgh 1 | 4,200.00 | 800.00 | 5,000.00 |
| 510-512 Federal Street, Pittsburgh 1 | 44,000.00 | 5,439.00 | 49,439.00 |
| 208 Smithfield Street, Pittsburgh 1 | 79,100.00 | 6,500.00 | 85,600.00 |
| Third Avenue, Pittsburgh 1 | 85,440.00 | 12,791.00 | 98,231.00 |
| 1633-39 Pennsylvania Avenue, Pittsburgh | |||
| 1 | 25,250.00 | 3,000.00 | 2 28,250.00 |
| 46 and 48 Eighteenth Street, Pittsburgh | |||
| 1 | 19,200.00 | 19,200.00 | 1 38,400.00 |
| Twentieth and Pennsylvania Avenues, Pitt- | |||
| sburgh 1 | 18,000.00 | 5,544.00 | 23,544.00 |
| 2017 Pennsylvania Avenue, Pittsburgh 1 | 7,200.00 | 800.00 | 8,000.00 |
| 2025-31 Pennsylvania Avenue, Pittsburgh | |||
| 1 | 28,800.00 | 3,740.00 | 32,540.00 |
| 208 East Stockton Avenue, Pittsburgh 1 | 14,400.00 | 7,566.00 | 21,966.00 |
| 416-18 Federal Street, Pittsburgh 1 | 72,000.00 | 6,264.00 | 78,264.00 |
| Federal and Montgomery Streets, Pitts- | |||
| burgh 1 | 48,400.00 | 14,880.00 | 63,280.00 |
| 926 Western Avenue, Pittsburgh 1 | 4,650.00 | 3,500.00 | 3 8,150.00 |
| 806 Pennsylvania Avenue, Pittsburgh 4 | 60,000.00 | 36,080.00 | 96,080.00 |
| Chestnut Street, Pittsburgh 5 | 3,580.00 | 10,456.00 | 14,036.00 |
| Staunton farm 5 | 22,000.00 | 14,286.00 | 36,286.00 |
| M. K. farm 5 | 2,300.00 | 500.00 | 2,800.00 |
| Purdy farm5 | 18,200.00 | 2,000.00 | 20,200.00 |
| McPherson farm5 | 8,940.00 | 2,250.00 | 11,190.00 |
| J. R. Brown farm 5 | 3,150.00 | 700.00 | 3,850.00 |
| Stevenson farm5 | 18,410.00 | 2,500.00 | 20,910.00 |
| Elliott farm 5 | 3,500.00 | 3,500.00 | |
| Homestead of Joseph W. Craig 6 | 15,960.00 | 11,880.00 | 27,840.00 |
| Thirteenth and Pike Streets, Pittsburgh | |||
| 1 | 80,000.00 | 87,000.00 | 167,000.00 |
| Eighteenth and Pike Streets, Pittsburgh | |||
| 1 | 52,944.00 | 41,294.00 | 94,238.00 |
| Twentieth and Pike Streets, Pittsburgh 1 | 72,000.00 | 108,000.00 | 180,000.00 |
| Twenty-first and Pike Streets, Pittsburgh | |||
| 1 | 54,720.00 | 98,496.00 | 7 153,216.00 |
| Staunton property, Pittsburgh 1 | 10,800.00 | 45,312.00 | 56,112.00 |
*195 The items of gross income in controversy in this appeal are exclusively income from the real estate owned by petitioner as devisee of Joseph W. Craig and enumerated in the preceding paragraph hereof; and the depreciation deduction in controversy is claimed with reference to buildings located on that real estate.
"Sewickley Cemetery" is a corporation having its domicile in the Borough of Sewickley, Allegheny County, Pennsylvania, and was incorporated by an Act of Assembly of the Commonwealth of Pennsylvania approved April 11, 1859. Pertinent parts of that Act read:
Section 1. BE IT ENACTED by the Senate and House of Representatives, of the Commonwealth of Pennsylvania in General Assembly met, and it is hereby enacted by the authority of the same, that G. E. Warner, *3848 Dr. John Dickson * * *, be and they and their successors are hereby created a body politic and corporate in law under the name and title of the Sewickley Cemetery, and by that name shall have perpetual succession, and be able and capable in law to have and use a common seal, to sue and be sued, implead and be impleaded, in all Courts of law and equity, and to do all such other things as are incident to a corporation.
Section 2. That the said corporation shall, at least once in every year hereafter, fill by election by ballot, all vacancies which may occur, and may at the same time or other times, increase and add to their number from those who may be lot holders in the cemetery, so that the said company shall never be reduced to less than ten, nor exceed thirty members; and they shall have full power to ordain, establish and put in execution all such by-laws, rules and regulations, not contrary to the Constitution and laws of the United States or of this State, which may be necessary for the proper government of this corporation, its officers and affairs, and, until the election of managers shall exercise all the powers thereof.
Section 4. That the said corporators' managers*3849 shall have power to receive all and singular such gifts, bequests and donations of property as may be made, and to use the same for the benefit of the corporation; to contract for and purchase from the owner or owners thereof a tract of land in Allegheny County not exceeding in the whole fifty acres, and the same to lay out and ornament, and to divide and arrange it into suitable plots and burial lots, remove and alter old and erect new buildings, and to do all other things proper or necessary to be done to adapt the said ground for the purpose of a cemetery, and to sell and dispose of said plots and burial lots in fee simple, or otherwise, for the purposes of sepulture, to individuals, societies or congregations, without distinction or regard to sect under such conditions, rules and regulations as the said corporators or managers may establish for the government of lot holders, visitors to the cemetery, and burial of the dead: Provided, that the lots granted by the said association for burial lots shall not be used for any other purpose; and they shall be free from seizure, levy or sale, under or by virtue of any execution against any grantee or grantees of said association for such*3850 purpose.
Section 6. That the said corporation shall be capable of holding so much personal property as may be necessary for the purpose of this incorporation, and it shall be the duty of the managers to devote all the income of whatsoever kind to the purposes of the corporation; and after a sufficient sum shall have been received from the sale of lots and expended in the payment for the cemetery ground and improvement thereof, to set aside at least twenty per centum, *196 and more if it can be spared, out of the proceeds of all subsequent sales of lots to be invested in ground rents, mortgages or stocks of the Commonwealth of Pennsylvania, for the creation of a fund, the income of which will be applied as may be necessary for the perpetual maintenance of the cemetery in proper order and security; and any failure in the duties aforesaid shall subject said managers or corporators to the control of the competent judicial authority for correction.
Section 7. That the original conveyance of lots from the corporation to individuals may be evinced either by deed, or by a certificate signed by the president and countersigned by the secretary or treasurer, as by the rules and*3851 regulations or by-laws shall be required; and such deed or certificate, specifying that such a person is the owner of such a lot or lots, shall vest in the proprietor, his heirs and assigns, a right in fee simple to such lot or lots; and said certificates shall have the same force and effect as deeds duly executed in other cases, and may be recorded, and certified copies thereof shall be evidence, as in other cases.
Section 8. That any person who shall willfully destory, mutilate, deface, injure or remove any tomb, monument or gravestone, or other structure, placed in the cemetery aforesaid; or any fence, railing or other work for the protection or ornament of the said cemetery; or shall willfully destroy, cut, break or injure any tree, shrub or plant within the limits of said cemetery, shall be deemed guilty of a misdemeanor, and shall upon conviction thereof before any court of competent jurisdiction, be punished by a fine of not less than five dollars or more than one hundred dollars, and by imprisonment in the county jail for a term of not less than one nor more than thirty days, according to the nature and aggravation of the offense; and such offender shall also be liable*3852 in an action of trespass, in the name of the said corporation to pay all such damages as have been occasioned by his unlawful act or acts; which money, when recovered, shall be applied by the said corporation, under the direction of the Managers, to the reparation and restoration of the property destroyed or injured as above; and members of said corporation or the lot owners shall not thereby be prevented from testifying in any case at law to which said corporation shall be a party.
In addition to the power to receive gifts, bequests and donations of property specially granted it in the Act of Assembly of the 11th April, 1859, "Sewickley Cemetery" is authorized by an Act of Assembly of the Commonwealth of Pennsylvania, approved May 14, 1874 (P.L. 1874, p. 165), "to take and hold any grant, donation or bequest of property upon trust, to apply the same, or the income thereof, under the direction of the Board of Managers, for the embellishment of said Cemetery * * * or for improving the said premises in any other manner or form consistent with the design and purpose of the Act of incorporation."
By deed dated November 24, 1919, recorded in the office of the Recorder of Deeds in and*3853 for Allegheny County, Pennsylvania, Deed Book, vol. 1978, p. 596, Walter E. Patton, Esq., conveyed to petitioner certain real estate situated in Sewickley, Pa., and adjoining the lands of the Sewickley Cemetery, for the consideration of $6,500, to him paid. By deed dated July 12, 1921, recorded in the office of the Recorder of Deeds in and for Allegheny County, Pa., in Deed Book, *197 vol. 2069, p. 232, petitioner donated and conveyed said tract of land to "Sewickley Cemetery" in consideration of a "wish and desire to donate the hereinafter described premises for the enlargement, improvement and beautifying of the grounds of the Cemetery Association, as well as for one dollar." The value of the ground conveyed to Sewickley Cemetery as aforesaid, was $6,667, that is, $6,500 cash paid by petitioner therefor and cash paid for title insurance, registration, etc., $167.
"Sewickley Cemetery" accepted the ground above described as a donation or gift, went into possession of the same, incorporated it into the grounds owned by the corporation and used only for the purposes expressed in its charter.
The petitioner is the owner of one or more lots in the "Sewickley Cemetery," hereinbefore*3854 described.
OPINION.
MILLIKEN: The first issue was decided by the Board in George L. Craig et al. v. Commissioner,7 B.T.A. 504">7 B.T.A. 504, and petitioner in the brief filed in his behalf in this proceeding states that it is no longer urged.
Depreciation should be computed on the values and at the rates set forth in the findings of fact.
The third issue presents the question whether the value of the gift made by petitioner to Sewickley Cemetery is deductible from his gross income for the taxable year under the provisions of section 214(a)(11)(B) of the Revenue Act of 1921, which provides:
SEC. 214. (a) That in computing net income there shall be allowed as deductions:
* * *
(11) Contributions or gifts made within the taxable year to or for the use of: * * * (B) any corporation, or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or eductional purposes, including posts of the American Legion or the women's auxiliary units thereof, or for the prevention of cruelty to children or aminals, no part of the net earnings of which inures to the benefit of any private stockholder or individual; *3855 * * *
Petitioner insists that Sewickley Cemetery is a corporation organized and operated exclusively either for charitable purposes or for religious purposes; that the word "charitable" is used in section 214(a)(11)(B) in the generally accepted legal sense; and that a cemetery not operated for profit is either a charitable or religious organization. There is serious doubt whether a cemetery such as the one here involved is a charity within the generally accepted legal meaning of that word. See Donnelly v. Boston Catholic Cemetery*198 Association,146 Mass. 163">146 Mass. 163; 15 N.E. 505">15 N.E. 505, where Judge Holmes held that a cemetery not operated for a private gain was not a charity in the sense that it was not liable for its torts. However this may be, we are of the opinion that the question should be answered by ascertaining, if possible, the sense in which Congress used the words and that for this purpose we may look to other provisions of the Revenue Act of 1921 and similar provisions in other revenue acts which were enacted both prior and subsequent to the Revenue Act of 1921. Cf. *3856 Tiger v. Western Investment Co.,221 U.S. 286">221 U.S. 286; Cope v. Cope,137 U.S. 682">137 U.S. 682; and United States v. Freeman,3 How. 556">3 How. 556. Thus we find that it is provided in section 231 of the Revenue Act of 1921:
SEC. 231. That the following organizations shall be exempt from taxation under this title -
* * *
(5) Cemetery companies owned and operated exclusively for the benefit of their members or which are not operated for profit; and any corporation chartered solely for burial purposes as a cemetery corporation and not permitted by its charter to engage in any business not necessarily incident to that purpose, no part of the net earnings of which inures to the benefit of any private stockholder or individual;
(6) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual; * * *.
Here Congress placed in one paragraph cemeteries not operated for gain and in a distinct*3857 and separate paragraph corporations created and operated for charitable or religious purposes, thus indicating that the latter terms did not include the former. Without further elaboration on this point, it is sufficient to point out that the precise question before us was decided by the United States District Court for the District of Massachusetts in Schuster v. Nichols, 20 Fed.(2d) 179, in an opinion which elaborately discusses the question involved and in which we concur. There the question was whether a taxpayer had the right to deduct, to the extent prescribed by the statute, contributions made in the years 1918, 1919, 1920, and 1921 to a cemetery company similar to Sewickley Cemetery. The learned judge, in referring to the fact that in Milford v. Commissioners of Worcester County,213 Mass. 162">213 Mass. 162; 100 N.E. 60">100 N.E. 60, the court, in holding that a cemetery corporation was not exempt from taxation, had placed its decision not on the ground whether such an organization was a charity, but on the ground that a review of the Massachusetts statutes demonstrated that in so far as exemption from taxation was concerned, cemetery corporations*3858 had been treated as a class by themselves, stated: "I am of opinion that the decision in the case now before me can be well idsposed of on the same ground." After *199 quoting from section 214(a)(11) of the Revenue Act of 1918, and section 214(a)(11)(B) of the Revenue Act of 1921, the learned judge said:
* * * On any question of interpretation it is permissible to resort to the provisions of the whole act, in order to ascertain therefrom what meaning dubious language is intended to convey. Milford v. County Commissioners of Worcester, supra.
The provisions of Section 231 of the Revenue Acts (Comp. St. § 6336 1/8o) also furnish unmistakable indication that it was not the intention of those who enacted the laws to bring cemetery corporations within the class of corporations devoted to charitable purposes. This section deals with the exemption of certain corporations from the corporation income tax. Clause 6 of the section exempts corporations "organized for religious, charitable, scientific, literary or educational purposes"; but, notwithstanding that charitable corporations were included among the corporations exempt under clause 6, it was deemed*3859 necessary to incorporate another caluse (clause 5) expressly relieving cemetery corporations from the burden of the tax.
* * *
My conclusion is, therefore, that the East Douglas Evergreen Cemetery Company, to which the plaintiff made his contributions, was not a corporation organized and operated exclusively for charitable purposes within the meaning of the applicable Revenue Acts, and that the action of the Commissioner of Internal Revenue in disallowing the deductions was correct.
While the reasoning in the above opinion disposes of the question herein involved, it is pertinent to point out that from the very inception of the income-tax legislation under the Sixteenth Amendment, Congress has always placed cemetery companies not operated for private gain in a category separate and apart from charitable or religious organizations. Thus, the Revenue Act of 1913, while exempting charitable and religious corporations from taxation, made the further provision for the exemption of cemeteries not operated for the benefit of their members. Similar provisions are found in the Revenue Act of 1916. In neither of these Acts was any deduction allowed for contributions or gifts of any*3860 character. The first deduction of this kind is to be found in the Revenue Act of 1917 (section 1201, amending section 5 of the Revenue Act of 1916) where provision is made for the deduction to a limited extent of gifts and contributions to certain corporations, including those organized and operated for charitable or religious purposes, but which does not in terms include cemeteries not operated for the benefit of their members. Congress had in the two previous Acts specifically stated what corporations were exempt from taxation and had separated into two distinct classes corporations of a charitable or religious nature and cemeteries which were operated without profit to their members. It is a significant fact that with this classification already incorporated in the taxing acts, Congress, when making provision for deduction of *200 gifts and contributions from gross income, included the one but failed to include the other.
Similar provisions of the Revenue Acts of 1918 and 1921 are discussed in Schuster v. Nichols, supra. In the Revenue Acts of 1924 and 1926, we find that in section 231 charitable and religious corporations are placed in one paragraph*3861 and such cemeteries in another, and that while section 214 of each Act provides for the deduction of gifts and contributions made to one class, it makes no such provision as to gifts and contributions to the other. Having thus reviewed the right of individual taxpayers to deduct gifts and contributions, we turn now to the provisions relative to the taxation of trusts and estates. Section 219(b) of the Revenue Act of 1918, provides that a fiduciary shall be allowed as a deduction (among others) "any part of the gross income which, pursuant to the terms of the will or deed creating the trust, is during the taxable year paid to or permanently set aside for * * * any corporation, organized and operated exclusively for religious, charitable, * * * purposes * * *, no part of the earnings of which inures to the benefit of any private stockholder or individual." No reference is made to cemeteries similar to Sewickley Cemetery. Similar provisions are found in section 219(b) of the Revenue Act of 1921. Section 219(b)(1) of the Revenue Act of 1924 adds to this deduction income of a trust paid or permanently set aside "for the establishment, acquisition, maintenance or operation of a public*3862 cemetery not operated for profit." A similar provision is contained in section 219(b)(1) of the Revenue Act of 1926. The Revenue Act of 1924 is the first revenue Act which permits the deduction of anything in the nature of a gift to a cemetery not operated for profit, and this deduction is limited to the computation of the net income of trust estates and is confined to such cemeteries only when public in character.
We thus find that, from the first revenue act to the last, Congress has consistently and persistently placed charitable and religious institutions in one class and cemeteries not operated for gain in a distinct and separate class; that wherever provision has been made permitting deduction by individuals of gifts and contributions, one class has been included and the other not mentioned; and, finally, when Congress determined that it was proper that income paid to or set aside for such cemeteries should be permitted as a deduction, such intention was made evident in no uncertain manner and such cemeteries were described with most meticulous exactness. We should not join together classes which Congress has seen fit to put asunder. Looking to all the provisions of the*3863 Revenue Act of 1921, we find that Congress did not include cemeteries not operated for gain in the category of religious or charitable corporations and that this intention *201 runs through all the revenue acts enacted prior and subsequent to the Revenue Act of 1921.
The action of respondent in refusing to permit a deduction of the value of the gifts made by petitioner to Sewickley Cemetery is approved.
Reviewed by the Board.
Judgment will be entered on 15 days' notice, under Rule 50.
Footnotes
1. Buildings are brick; depreciation rate allowable 2 per cent. ↩
2. This property sold in 1920 for $48,440.60 net. ↩
3. This property sold in 1921 for $7,900.25 net. ↩
4. Buildings are steel and brick; depreciation rate allowable 1 per cent. ↩
5. Buildings are frame; depreciation rate allowable 3 per cent. ↩
6. No depreciation allowable. ↩
7. This property sold in 1921 for $241,974.50 net. ↩