*2373 The deduction under Revenue Act of 1921, section 403(a)(2), of the value of previously taxed property should not be reduced merely because it was commingled with other property in the estate and from the commingled fund expenses were paid which are deductible under section 403(a)(1).
*580 The respondent determined a deficiency of $19,961.23 in estate tax. The issue is whether so much of funeral expenses, executors' commissions, administration expenses, and debts of petitioner's decedent as were paid from a commingled fund of the proceeds from previously taxed property received under the will of a prior decedent and property otherwise owned by decedent may be applied to reduce *581 the deduction for prior taxed property allowable under section 403(a)(2) of the Revenue Act of 1921.
FINDINGS OF FACT.
The petitioner is the executor of the estate of Jennie W. Delano, who died on December 2, 1922, leaving a gross estate of $2,492,541.21. The value at the time of death of the several classes of property included therein was as follows: *2374
| Real estate | $200,000.00 |
| Stocks and bonds | 1,755,528.71 |
| Mortgages, notes, cash, and insurance | 61,203.27 |
| Jointly owned and other miscellaneous property | 54,871.84 |
| Property identified as taxed within five years | 420,937.39 |
| 2,492,541.21 |
The property identified as taxed within five years consisted of shares of common and preferred stock and certain live stock at Barrytown, N.Y., which was received by the decedent under the will of Warren Delano, who died within five years prior to the death of the decedent. This property was included in the estate of Warren Delano and was valued therein for estate-tax purposes at $363,170.42. It was included in the gross estate of petitioner's decedent at a value of $420,937.39.
The following expenses and debts of the decedent were paid from funds of her estate:
| Funeral expenses | $3,687.08 |
| Executor's commissions | 58,375.06 |
| Miscellaneous administration expenses | 41,729.87 |
| Debts of the decedent | 33,455.58 |
| 137,247.59 |
On December 7, 1922, the petitioner, as executor, opened a cash account for the estate of the decedent, in which funds of the estate from all sources were deposited, including the proceeds*2375 of the sale of property received under the will of Warren Delano. The petitioner made investments from time to time on behalf of the estate out of the funds deposited, and also paid legacies, taxes, administration expenses, and debts of the decedent, all of which were debited in the cash account. From December 7, 1922, to January 2, 1923, all deposits consisted of funds derived from property other than that received from Warren Delano. On January 3, 1923, a deposit of $3,386.50 was made of part of the proceeds of a sale of stock received from Warren Delano, and no other deposits of funds derived from the latter class of property were made until May 9, 1923. The executor paid administration expenses and debts in the aggregate amount of $29,527.31 up to May 9, 1923, of which $26,140.81 was paid *582 from the proceeds of property other than that received from Warren Delano. The cash account contained funds representing both classes of property from January 3, 1923, to September 3, 1925. In issuing checks for disbursements made on behalf of the estate, there was no indication on them whether they were paid from the proceeds of prior taxed or other property.
The respondent, *2376 in computing the amount of the deduction allowable under section 403(a)(2) of the Revenue Act of 1921, determined that, of the amount of $137,247.59 deductible for administration expenses and debts, $26,140.81 was paid out of funds representing property other than that received from Warren Delano, and that $111,107.78 was paid from previously taxed property. He then deducted the latter amount from the value at which the property received from Warren Delano was taxed in his estate ($363,170.42) and determined a deduction from gross estate on account of property taxed within five years in the amount of $252,062.64.
OPINION.
STERNHAGEN: The only question raised is as to the propriety under section 403, Revenue Act of 1921, of reducing the deduction for the value of prior taxed property ($363,170.42) to the extent of the amount ($111,107.78) of expenses paid out of a commingled fund consisting of the proceeds from some prior taxed property and some of the independent property of petitioner's decedent. There was always ample independent property to support the disbursements without invading the prior taxed value. No question is raised such as that in *2377 . In fact, however, prior taxed property was sometimes sold, the proceeds commingled in the general bank account of the estate, and the disbursements indifferently drawn from the commingled account. Out of the total undisputed disbursements of $137,247.59, the evidence shows only $26,140.81 as clearly paid from decedent's independent property, leaving $111,106.78 (not $111,107.78 as computed by respondent) as paid from the commingled fund. Respondent holds that to allow the full amount of $363,170.42 as the deduction for prior taxed property without subtracting this $111,106.78 is to allow a double deduction contrary to the statute.
The question has been considered before and fully discussed. ; affd., ; ; . These decisions establish petitioner's right to deduct, under section 403(a)(2) as prior taxed property, $363,170.42, without subtracting therefrom $111,107.78 or any other amount of the deductible administration expenses.
Judgment will be entered under*2378 Rule 50.