*1152 In the taxable year petitioner ordered the sale of certain securities and at the same time, acting as agent for his wife, ordered the purchase of the same quantities of the same issues for the account of his wife; he also, as agent for his wife, ordered the sale of certain of her securities and at the same time ordered the purchase of the same quantities of the same issues for his own account. The orders were executed through a brokerage house with which petitioner and his wife had substantial individual accounts and the transactions were reflected in their separate accounts. Held, the sales were bona fide and the losses sustained may be deducted from the aggregate gross income reported in a joint return filed by petitioner. Frank B. Gummey,26 B.T.A. 894">26 B.T.A. 894, followed.
*139 The respondent determined a deficiency in income tax for the year 1929 in the amount of $7,987.52. The major part of the deficiency arises from the disallowance of claimed losses on the sale of corporate stocks, and this disallowance is*1153 the only item questioned by petitioner.
FINDINGS OF FACT.
During the taxable year 1929 petitioner was married and living with his wife, Florence B. Fawsett, in Milwaukee, Wisconsin.
A joint return was filed in which was included the income of petitioner and the income of his wife. Among the deductions claimed in the return were losses sustained by the petitioner in the taxable year in the sum of $25,302.50 on account of sales made by him of certain shares of stock, and losses sustained by his wife in the sum of $35,941 in the taxable year on account of sales of securities belonging to her.
At the time of the transactions the wife of petitioner had an estate of her own, which was her separate property, amounting to more than $200,000. Petitioner was and had been for a number of years the manager of his wife's estate, with full authority to manage and control the same, and to buy and sell securities for her and on her account in accordance with his judgment and discretion without obtaining special authority for the particular transactions, and acted for her as her agent and attorney and as the manager of her estate in the transactions wherein losses were claimed.
On*1154 September 12, 1929, the petitioner verbally instructed Paine, Webber & Co., brokers of Milwaukee, Wisconsin, who were members *140 of the New York Stock Exchange, to sell for the account of his wife 500 shares of Schulte Retail Stores, which order was executed pursuant to instructions. For 100 shares a price of 19 1/4 was received and for 400 shares a price of 19 1/8 was received. On the same day petitioner instructed Paine, Webber & Co. to buy for his account 500 shares of Schulte Retail Stores, which stock was acquired by petitioner in two blocks, one of 100 shares and one of 400 shares at the same prices as received by petitioner's wife from the sales of corresponding blocks of her shares.
On November 13, 1929, petitioner directed the following letter to Paine, Webber & Co.:
DEAR SIRS:
Please execute the following orders:
Sell at the market for my account, Charles F. Fawsett, 1000 shares Phillips Petroleum.
Buy at the market for the account of Florence B. Fawsett, 1000 shares Phillips Petroleum.
Sell at the market for the account of Florence B. Fawsett, 500 shares Cerro de Pasco, and 500 shares St. Paul & Pacific, preferred.
Buy at the market for my account, *1155 Charles F. Fawsett, 500 shares Cerro de Pasco, and 500 shares St. Paul and Pacific, preferred.
Sell at the market for my account, Charles F. Fawsett, 500 shares Schulte Retail Stores.
Buy at the market for the account of Florence B. Fawsett, 500 shares Schulte Retail Stores.
Sell at the market for my account, Charles F. Fawsett, 500 shares Indian Refining Certificates.
Buy at the market for the account of Florence B. Fawsett, 500 shares Indian Refining Certificates.
Very truly yours,
CFF-W.
The instructions given to the brokers were carried out and the orders duly executed, the sales of all securities being made on the New York Stock Exchange in the regular course of business. At the time of the transactions and for a number of years prior thereto both petitioner and his wife had separate accounts with Paine, Webber & Co. and carried on a substantial business through these brokers in the purchase and sale of securities. The transactions in each account greatly exceeded the amounts involved in the transactions under consideration.
Regular brokers' commissions were paid for the various sales and purchases of securities and these commissions were charged to and*1156 paid by petitioner and his wife, respectively. All of the stocks purchased for the account of the petitioner were subsequently paid for in full by him, ordered out, and certificates issued in his name, and all of the stocks purchased for the account of his wife were subsequently paid for in full, ordered out, and certificates issued to her *141 and in her name. All stock purchases for the account of petitioner were paid for by him and the securities purchased for his wife were paid for out of her separate estate. The stocks purchased by each were held throughout the remainder of the taxable year and thereafter.
The respondent disallowed the total amount of the losses from the sales of the above described securities, as suffered by both petitioner and petitioner's wife, basing his disallowance on the ground that the acquisition on the same day by each spouse of substantially the identical shares disposed of by the other prevented the allowance of the items as deductions under the revenue act.
OPINION.
ARUNDELL: At the time the sales of securities took place both petitioner and his wife were taxpayers within the meaning of the Revenue Act of 1928. Each had bought*1157 securities at a price and each had sold these securities for a price less than what they had paid for them. Under such circumstances each sustained a loss which section 23(e) permits to be deducted in determining their net income for the purpose of taxation.
But respondent contends that by reason of electing to report their income for 1929 in a joint return, a privilege which the statute grants to married persons, petitioner and his wife must, for all purposes of the revenue act, be treated as one. In , we held against the respondent's contention. While there may be some logic in his view, we find no authority for it in the revenue acts, and it is a cardinal rule of construction of taxing statutes that there can be no tax imposed by implication or construction, and in case of doubt or ambiguity, either as to the fact of the imposition or as to the amount thereof, it must be resolved in favor of the taxpayer. ; .
Sections 11 and 12 of the Revenue Act of 1928, the imposing provisions of the statute, impose a tax upon the taxable*1158 income of each individual. Each is defined as a taxpayer and the fact that the Congress, having regard to the marital status and in order to eliminate a large number of returns, sees fit to permit the inclusion in the one return of the income of husband and wife, does not serve to deny to these individual taxpayers the other benefits of the taxing statutes. No authority has been pointed out to us that a husband and wife are to be denied deductions for losses sustained by them because they see fit to jointly return their taxable income. , would seem to be authority for the proposition that Congress could not forcibly require a husband and *142 wife to jointly return their income, and while the Federal taxing acts have never pretended to do so, but have only permitted married people to file joint returns, we feel that this privilege is not bought by the sacrifice of their other rights under the statutes. Nor are we impressed with the argument of respondent that, if the view here announced is to prevail, then the deduction of each spouse is to be limited to the gross income of each. To accept this view*1159 we must deny 20 years of history in the administration of the income tax laws. "A page of history is worth a volume of logic." . The acceptance of the privilege of filing a joint return by a married couple carries with it no denial of their individual rights under the statute. Congress has exacted no penalty for the privilege it has granted and the Commissioner may not exact one.
Counsel for the respondent makes some contention as to the bona fides of the sales. The evidence settles this beyond possibility of question. Orders were given to and executed by an established brokerage house with membership on the New York Stock Exchange. Upon execution of the orders the separate accounts of petitioner and his wife were appropriately debited and credited and each was furnished the usual broker's memorandum showing execution. The wife had not only a separate account with the broker, but a separate estate amply sufficient to meet her obligation. In this respect the facts are different from those in *1160 , where the wife had no brokerage account and no funds and it was necessary for the husband to guarantee her account for the purchase of a block of stock like that which he ordered sold. The sales here were actual, completed transactions, and under the holding in , the loss sustained may be deducted on the joint return. See also .
Decision will be entered under Rule 50.