
    J. Renwick Wilkes, Petitioner, v. Commissioner of Internal Revenue, Respondent. J. Frank Wilkes, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket Nos. 12023, 12024.
    Promulgated April 19, 1928.
    
      Paul F. Myers, Esq., and E.B. Quiggle, Esq., for the petitioners.
    
      M. N. Fisher, Esq., for the respondent.
   OPINION.

Smith :

The question presented by this proceeding is whether the petitioners derived income in 1920 from the cancellation against them of certain indebtedness of theirs to the estate of Jane R. Wilkes, which was placed upon the books in 1921. The petitioners had been paid very nominal salaries prior to 1920 and had been permitted to withdraw from the business which they were serving additional, amounts for necessary living expenses. There was an understanding between the owner of the business prior to the date of her death in 1913 and her sons that the sons should never be required to repay the advances made to them for necessary diving expenses and this was acquiesced in by all of the heirs subsequent to 1913, and the same arrangement was continued. It. does not clearly appear of record whether the heirs returned as income for years prior to 1921 their salaries received plus advances. J. Ren-wick Wilkes testified that he doubted whether the advances had been returned as compensation. We are of the opinion that if the advances were not included as compensation they should have been for they were paid as such to the petitioners. There is no evidence that the petitioners actually derived any income from the bookkeeping entries made on the books of the Mecklenburg Iron Works in 1921. Certain entries should have been made on those books in 1920. If the petitioners derived any income from the agreements made among the heirs on November 1, 1920, that income was income of 1920 and not of 1921. The only compensation received by each of the petitioners from the Mecklenburg Iron Works for 1921 was salaries of $350 per month paid to each.

Judgment will be entered on 15 days' notice, wader Rule 50. '  