*2911 1. Petitioner is liable for income tax due upon income received by decedent prior to her death even though the estate has been fully administered and he has been discharged as administrator of the estate.
2. The evidence fails to establish that the respondent erred in taxing the decedent on all of the income of the Jacob Kaufmann estate.
*142 This proceeding is for the redetermination of deficiencies of $4,701.54 and $2,120.05 in income taxes for the years 1920 and 1921, respectively. In addition to claiming that the respondent is without authority to make an assessment of the taxes because of the fact that the estate has been fully administered and the assets have been distributed pursuant to a decree of the court having jurisdiction over the estate, it is alleged that error was committed in treating all of the income of the estate of Jacob Kaufmann, deceased, as taxable to the decedent, and in disallowing as a deduction, depreciation on buildings from which the income was in part derived.
FINDINGS OF FACT.
*2912 The petitioner is the duly appointed administrator de bonis non of the estate of Augusta Kaufmann, who died intestate December 31, 1921, a resident of Pittsburgh, Pa.
Jacob Kaufmann, husband of the decedent, died testate November 1, 1905, leaving surviving him, the decedent and five sons. The last will of Jacob Kaufmann, deceased, after making certain specific bequests, and bequeathing the sum of $135,000 to the decedent, in trust, for the benefit of the five sons and a nephew, left the residue of the estate to the decedent, and authorized her, as executrix, and upon her death, his executors, to dispose of the real estate, under the following provisions:
All the rest, residue and remainder of my estate, real, personal and mixed, whatsoever and wheresoever, I hereby give, devise and bequeath unto my beloved wife, Augusta Kaufmann, in lieu of her dower, to have, to enjoy, and to use the entire rents, profits, issues, income and interest arising from and out of the same, during her natural life, with the privilege of using as much of the principal of my estate, in addition to said rents, profits, issues, income and interest as she chooses to do from time to time, and, at her*2913 death, I hereby give, devise and bequeath, in equal proportions, share and share alike, such part of my real, personal and mixed property as may remain at the time of the death of my said wife, to my five (5) sons, Alfred D. Kaufmann, Raymond M. Kaufmann, Chester C. Kaufmann, Edwin J. Kaufmann and Karl C. Kaufmann, their heirs and assigns forever.
I hereby authorize and empower my said Executrix, Augusta Kaufmann, alone during her life, (and my said Executors, Alfred D. Kaufmann and Raymond M. Kaufmann, and their successor or successors after the death of my said wife, but not during her life) to grant, bargain, sell, convey and dispose of any part of or of the whole of my real estate, wheresoever situated, either at public or private sale, to such person or persons, corporations or partnerships, and for such price or prices, and upon such terms and conditions as they may deem prudent, and proper deeds of conveyance, to make, execute and *143 deliver therefor, to the purchaser or purchasers thereof, his, her, or their heirs and assigns forever, freed and discharged from all trusts whatsoever.
The estate of Jacob Kaufmann consisted of real estate, stocks, and other properties. *2914 He also left about $320,000 in life insurance, payable direct to his wife, as beneficiary. The proceeds of this insurance were deposited in a bank to the credit of the decedent in an account separate from other funds.
About two years after Jacob Kaufmann's death, Augusta Kaufmann arranged for a meeting of her sons at her some to discuss a division of the former's estate. After some discussion of the question among those present at the meeting, the decedent, in the presence of her five sons, said:
You boys can have it, and I do not want to know anything about what you are doing; you can run the thing yourselves, the whole five boys, and I will take the income from the properties.
You boys can run it and you can account to me for the income from these separate properties.
The "separate properties" referred to by the decedent were mortgages purchased with part of the proceeds of the life insurance.
Subsequent to this meeting, the funds of the estate, together with what was left of the insurance money collected and held by the decedent, were, with the exception of a small account established by the decedent in her name, deposited to the credit of a bank account of the*2915 Jacob Kaufmann estate. Raymond M. Kaufmann, who kept the single set of books of the estate, accounted and rendered a statement to his brothers every six months "for everything that was done."
For the year 1920 the decedent, and for the year 1921 the administrator of decedent's estate, reported gross income from real estate as follows:
| 1920 | 1921 | |
| Penn Ave. and St. Clair St | $10,016.61 | $4,872.69 |
| 413 Fourth Ave., Pittsburgh, and John St., Braddock | 3,096.98 | 3,960.34 |
| Superior Place | 15,258.57 | 17,036.24 |
| Total | 28,372.16 | 25,869.27 |
The Penn Avenue and St. Clair Street property is located in the principal business section of the East Liberty District of Pittsburgh, and in the taxable years consisted of a lot of undisclosed dimensions, improved by a five-story brick building in front, and six brick and frame buildings in the rear of the lot, two of which had stores on the first floor. In 1920 and 1921 title to the property was held by Edwin J. Kaufmann, one of decedent's sons, the property having been acquired on March 15, 1909, for the sum of $187,500. Part of the money paid for the property came from the insurance fund of the decedent and part from the*2916 estate of Jacob Kaufmann.
*144 The property located at 413 Fourth Avenue was improved by a seven-story office building of brick construction. The decedent, who held title to the property in 1920 and 1921, acquired the real estate by purchase on November 17, 1908, for the sum of $95,000.
In 1920 and 1921 title to the John Street property in Braddock, consisting of a parcel of ground improved by a frame building, was held by Alfred D. Kaufmann, Raymond M. Kaufmann, and Augusta Kaufmann, executors of the estate of Jacob Kaufmann, it having been acquired by them on January 11, 1916, as the result of a series of trades, at a cost of $6,500.
The Superior Place property was purchased on January 20, 1912, for a consideration of $52,200, part of which money came from the insurance fund of the decedent and part from Jacob Kaufmann's estate. Title tothe property was taken in the name of Raymond M. Kaufmann and remained in his name during the years 1920 and 1921.
The four above-mentioned pieces of real estate comprise all of the properties from which rent was accounted for in 1920 and 1921 in the name of the decedent. In the return filed by the decedent for 1920, depreciation*2917 was claimed on these four pieces of property as follows:
| Valuation | Per cent | Amount | |
| Penn Avenue and St. Clair Street | $ 90,000 | 2 | $ 1,800 |
| 413 Fourth Avenue | 25,000 | 2 | 500 |
| John Street, Braddock | 3,000 | 3 | 90 |
| Superior Place | 108,000 | 2 | 2,160 |
| Total | 4,500 |
For the year 1921 the administrator of decedent's estate claimed a total of $4,460 for depreciation on the same properties. The depreciation claimed each year as a deduction was disallowed by the respondent.
In her return for the year 1920 the decedent reported the sum of $ 5,365 as interest received on corporate mortgages, the sum of $ 4,216.50 as interest on bank deposits and mortgages, the sum of $ 951 representing dividends on stocks, and the sum of $261.25 as interest on Liberty bonds. For the year 1921 the administrator of decedent's estate returned the sum of $1,096.50 as interest on bank deposits and mortgages, and the sum of $572.50 as dividends on stocks. The decedent owned all of the property from which the income was derived, with the exception of the Liberty bonds, one-half of which was owned by her five sons.
The returns filed by the decedent and the administrator of her estate*2918 for the years 1920 and 1921, report all of the income retained *145 by the decedent in those years from the estate of Jacob Kaufmann and her separate property. During the taxable years Raymond M. Kaufmann collected an undisclosed amount of dividends, interest on bonds of the United States and foreign countries, Liberty and other bonds, interest on bank deposits, and "interest from corporations." Some of the assets from which the income was derived were owned by the Jacob Kaufmann estate, and some by the sons, individually. Raymond M. Kaufmann never made a record segregating the assets of the Jacob Kaufmann estate from the assets of each of the five sons. The total amount of income received from all of the assets was divided equally among, and was returned by, the five sons.
OPINION.
ARUNDELL: Concerning the first issue, the petitioner does not claim that the deficiency is barred by the statute of limitations, but contends that inasmuch as the deficiency notice was mailed after the estate had been fully administered and the assets distributed in accordance with a decree of the court having jurisdiction over the estate, the respondent is precluded from making an assessment*2919 of the taxes alleged to be due. A complete answer to this question is found in , wherein we held that notwithstanding the fact that an estate has been fully administered and the administrator discharged, the Government has a right to collect the tax due from the estate within the statutory period provided by Congress. See also .
It is claimed that the respondent erred in "treating the entire income of the estate of Jacob Kaufmann, deceased, as taxable to the estate of Augusta Kaufmann, deceased." This is denied by the respondent.
In his audit of the returns the respondent found that the assets of the two estates were so intermingled that it was impossible to separate the income derived from each one, with the result that he taxed all of the income to the petitioner. The petitioner seeks to avoid the result of this action by showing that the property which produced the income in controversy was not owned by either estate, but was held by the five sons through a gift of their mother, the decedent, completed after the meeting of the family referred to in our findings of fact.
It seems clear*2920 from the evidence that the decedent desired to make some division of her husband's estate, as well as of her separate property, among her sons, but the record does not disclose to what extent her wishes in that respect were carried out.
*146 The proof shows that all of the funds of the Jacob Kaufmann estate, together with the unexpended portion of the insurance collected by the decedent as the beneficiary of policies on the life of her husband, were, with the exception of a small amount retained by the decedent for her personal use, deposited to the credit of a bank account in the name of the Jacob Kaufmann estate. Raymond M. Kaufmann, one of the five sons, managed this fund, and other personal property and choses in action, title to which was held by the estate. He rendered a statement to his brothers every six months of what had been done with, and earned by, the property. The assets under the management of Raymond M. Kaufmann also included certain property belonging to the sons, but in keeping the books no attempt was made to separate the assets of the Jacob Kaufmann estate from the property owned by the sons. Nor was testimony offered to show the actual transfer of*2921 specific assets of the estate of Jacob Kaufmann by either the executors of the estate or the decedent to any of the sons, or to identify the assets producing the income in question. We are, therefore, without facts showing whether the assets producing the income were owned by the decedent, the Jacob Kaufmann estate or the sons, leaving us in very much the same situation the respondent found himself in at the time of his audit of the returns.
The evidence before us is insufficient to overcome the presumption existing in favor of the respondent's determination and we must, therefore, approve his action.
The decedent did not hold title to the Penn Avenue and St. Clair Street, and Superior Place properties and is not entitled under the taxing acts to depreciation thereon, , and Frank Holton & Co., B.T.A. 1317, and as the beneficiary of the estate of Jacob Kaufmann she is not entitled to a deduction for depreciation on the John Street property held in name of the executors of the estate, *2922 ; affd. ; and .
The Fourth Avenue property was acquired by the decedent on November 17, 1908, at a cost of $95,000. Of the total purchase price, the petitioner's witness testified that the cost of the building was $25,000, the value used in the decedent's returns for exhaustion purposes. No evidence was offered to prove the March 1, 1913, value of the building. Lacking the March 1, 1913, value of the building, we have no alternative but to sustain the respondent's action as to this piece of property.
Judgment will be entered for the respondent.