
    Appeal of CHARLES E. NAUSS.
    Docket No. 6717.
    Decided September 23, 1926.
    
      Joseph E. Kohan, Esq., for the petitioner.
    
      Arthur H. Fast, Esq., for the Commissioner.
   Maeqtjette

: This appeal is from the determination of a deficiency in income tax for the year 1921 in the amount of $571.63.

FINDINGS OF FACT.

The petitioner is an individual residing in New York City.

Wendolin J. Nauss, the father of the petitioner, died testate on October 26, 1918. His last will and testament provided that after the payment of his just debts, funeral and testamentary expenses, and the erection of a mausoleum, the petitioner and Edwin N. Nauss should each receive one-sixth of the rest, residue and remainder of his estate.

On December 18, 1919, while the administration of the estate of Wendolin J. Nauss was still pending, Edwin N. Nauss died testate, leaving his entire estate in equal shares to four persons, of whom the petitioner was one.

Wendolin J. Nauss died seized of' certain securities which were appraised for the purposes of the Federal estate tax at $180,270.61. On June 14, 1921, the legatees under his last will and testament, pursuant to the laws of the State of New York, filed a written consent in the Surrogate’s Court for New York County, New York, in which the estate of Wendolin J. Nauss was being administered, fixing the value of the securities mentioned as of June 14, 1921, at $162,849.85 and agreeing that they should be distributed among said legatees at that value, and that the difference between the value of the securities as fixed for Federal estate-tax purposes and their value on June 14, 1921, should be credited in the accounts of the executors against the principal of the estate. The securities were distributed according to the consent so filed and the difference between said values, to wit, $17,420.76, was credited in the executor’s account against the principal of the estate.

The executors of the estate of Wendolin J. Nauss filed an income-tax return for the year 1921 showing a net income of $48,050.53. No deduction was claimed on account of the shrinkage in value of the securities mentioned.

The petitioner filed an income-tax return for the year 1921 and claimed as a deduction from gross income the amount of $3,397.90, representing the shrinkage in value between the date of the death of Wendolin J. Nauss and June 14, 1921, of the portion of said securities to which he was entitled under the last will and testament of Wendolin J. Nauss and the last will and testament of Edwin N. Nauss. The Commissioner disallowed the deduction and determined that there is a deficiency in tax for the year 1921 in the amount of $571.63.

Judgment for the Commissioner.  