1953 U.S. Tax Ct. LEXIS 89">*89 Decision will be entered for the respondent.
Petitioner Bennett H. Darmer supported his son for 27 weeks in 1949. On July 7, 1949, the son enlisted in the United States Navy and thereafter received no support from petitioner. Held, the statutory test for determining half of the support is in terms of money, not time, and petitioner did not furnish over half of the support for his son so as to be entitled to a dependency credit.
20 T.C. 822">*823 Respondent determined a deficiency in petitioners' income tax for the calendar year 1949 in the amount of $ 99.60. The deficiency arises from respondent's disallowing a dependency exemption claimed for petitioners' son, James E. Darmer. By appropriate assignment of error petitioners1953 U.S. Tax Ct. LEXIS 89">*90 contest this determination.
FINDINGS OF FACT.
Petitioners are husband and wife. They are residents of Arab, Alabama, and filed their joint income tax return for the taxable year 1949 with the collector of internal revenue for the district of Alabama.
Bennett H. Darmer, hereinafter called the petitioner, was employed by the Tennessee Valley Authority. His gross income was $ 4,243.42, from which $ 142.10 was withheld for Federal income tax and $ 254.61 (6 per cent) for retirement. Petitioner's 1949 tax return shows that he made contributions in the amount of $ 312.50, paid interest, taxes, and union dues in the respective amounts of $ 25.45, $ 93.35, and $ 48.
Petitioner owned and resided with his family in a small 5-room house in Arab, Alabama. The rental value of the house was not more than $ 50 per month in 1949. Petitioner purchased an automobile in April 1949 and, after allowance for his old car, owed $ 1,400. He borrowed $ 550 to pay on the car and paid the balance of $ 850 in cash.
In 1949, petitioner furnished the support for himself and his wife for the entire year and for a daughter born September 8, 1949. An exemption credit was claimed for the newborn daughter. In1953 U.S. Tax Ct. LEXIS 89">*91 addition, petitioner furnished a son with room and board until October 25, 1949, but did not claim him as a dependent. Petitioner also claimed an exemption for a second son, James E. Darmer, the dependent in question here.
Petitioner's minor son, James E. Darmer, lived at home with his parents and was supported entirely by them until July 7, 1949. James attended high school and was graduated at the end of the 1949 school year. Petitioner furnished James with food, shelter, two suits, and other necessary clothing and spending money. There was some extra expense on account of James' graduation from high school. Petitioner did not keep a precise record of his expenditures on behalf of his son and was unable to make an estimate thereof at the hearing.
James enlisted in the United States Navy as an apprentice seaman on July 7, 1949, and he received no support from petitioner while in the Navy. While serving in the Navy in 1949, James earned $ 75 per 20 T.C. 822">*824 month for approximately 3 3/4 months and $ 82.10 for 2 months, a total of $ 445.45. Besides his pay he was furnished shelter and had issued to him clothing valued at approximately $ 151. In addition, the Navy furnished him1953 U.S. Tax Ct. LEXIS 89">*92 food at a cost of about 65 cents per day and sent him to an electronics school.
As an ultimate fact we conclude that petitioner spent less than the Navy in support of his son, James E. Darmer, in 1949, and has not sustained his burden of proving that he furnished over half his son's support.
OPINION.
The only question in this case is whether petitioner furnished more than half of his son's support during the calendar year 1949 and is entitled to a dependency credit under section 25 (b) (1) (D) of the Code. Respondent admits that the requisite relationship exists and that the son's total earnings were less than $ 500 in 1949. Section 25 (b) (1) (D) and (3) (A) of the Code provided for the year 1949, as follows:
SEC. 25. CREDITS OF INDIVIDUAL AGAINST NET INCOME.
(b) Credits for Both Normal Tax and Surtax. --
(1) Credits. -- There shall be allowed for the purposes of both the normal tax and the surtax, the following credits against net income:
* * * *
(D) An exemption of $ 600 for each dependent whose gross income for the calendar year in which the taxable year of the taxpayer begins is less than $ 500, * * *
* * * *
(3) Definition of Dependent. -- As used in this 1953 U.S. Tax Ct. LEXIS 89">*93 chapter the term "dependent" means any of the following persons over half of whose support, for the calendar year in which the taxable year of the taxpayer begins, was received from the taxpayer:
(A) a son or daughter of the taxpayer, or a descendant of either,
Petitioner furnished the complete support for his son for the first 27 weeks in 1949. But after July 7, 1949, the son enlisted in the Navy and the petitioner thereafter did not furnish him any support. The statutory test for determining half support is measured by the amount of money spent, not the time involved. The applicable regulation is section 29.25-3 (d) (5), Treasury Regulations 111 (T. D. 5687, 1949-1 C. B. 9, 20) which reads as follows:
* * * *
(d) (5). Exemptions for dependents. -- Section 25 (b) (1) (D) allows to a taxpayer an exemption of $ 600 for each dependent whose gross income for the calendar year in which the taxable year of the taxpayer begins is less than $ 500, who receives more than one-half of his support from the taxpayer for such calendar year and who does not file a joint return with his spouse. For the purposes of this credit a dependent is a person who1953 U.S. Tax Ct. LEXIS 89">*94 is related to the taxpayer within one of the following relationships: child; * * * Whether or not over 20 T.C. 822">*825 half of a person's support, for the calendar year in which the taxable year of the taxpayer begins, was received from the taxpayer shall be determined by reference to the amount of expense incurred by the taxpayer for such support. * * *
Petitioner's idea appears to be that since he supported his son more than one-half of the taxable year regardless of the amount expended, he is entitled as a matter of law to the dependency credit which he claims. The statute involves, however, a test of cost of support, rather than time of support. If time were the test, then it is plain that petitioner would win because he has clearly proved that he was the sole support of his son for a period of more than 6 months during the taxable year, but it is plain that time is not the test. The test is cost and when that fact is considered we must hold that petitioner has not proved his case.
We have carefully considered petitioner's case. In our Findings of Fact we have given the amounts of support furnished by the Navy subsequent to James' enlistment therein on July 7, 1949. 1953 U.S. Tax Ct. LEXIS 89">*95 Petitioner was not able to estimate with any precision the amount of money expended for his son's support. We have considered petitioner's total income for 1949 of $ 4,243.42, petitioner's expenditures for items having nothing to do with the son's support, as well as petitioner's other family responsibilities. From this evidence it seems clear to us that petitioner did not furnish as much support to James in 1949 as did the Navy. Petitioner has not sustained his burden of proving that he furnished over half the support for his son in question during 1949.
Decision will be entered for the respondent.