
    In the Matter of Z. Edwin Meyer, Petitioner, against Spencer E. Bates et al., Constituting the Tax Commission of the State of New York, Respondents.
   Proceeding under article 78 of the Civil Practice Act to review a determination of the State Tax Commission which denied petitioner’s application for revision or refund of unincorporated business tax assessments for the years 1941 and 1942, transferred to this court by order of Albany County Special Term. Petitioner and his father were partners in business prior to the father’s death. By the terms of the partnership agreement petitioner was given certain options under which he could retain the father’s capital in the business after his death. The father’s will authorized and directed his executors to carry out this agreement and authorized their' continuance of the business. Petitioner elected to retain a substantial sum of his father’s investment in the business under the terms of the agreement whereby he was to pay his father’s estate 6% interest plus 29% of the net profits of the business. It is such payments to the estate which petitioner seeks to deduct as a business expense. By the agreement, which altered the usual situation resulting from the death of a partner, the capital retained in the business was subject to the risks of the business and was subordinated to general creditors of the business. All of the elements of a limited partnership are present, however the arrangement may be designated by the petitioner. It is not claimed that the estate of the father was a general partner or that a general partnership existed. However, the arrangement was such that under the provisions of the Tax Law, for taxation purposes a special partnership relationship existed, and the share of the profits paid to the estate may not properly be deducted as a business expense. Determination confirmed, with $50 costs and disbursements. Foster, P. J., Heffernan, Bergan and Coon, JJ., concur; Deyo, J., votes to confirm the determination insofar as profits are concerned and annul as to interest.  