
    Thomas F. Kelley, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 7036.
    Promulgated December 23, 1927.
    
      George I). Wick, Esq., for the petitioner.
    
      P. M. Glarh, Esq., and O..G. Holmes, Esq., for the respondent.
   OPINION.

Phillips:

The sole question here involved for determination is whether the petitioner was the owner of a one-fourth interest in the Lucas Coal Co., a partnership, or whether he owned a one-eighth interest, as contended by petitioner.

In Pennsylvania, where her inability to contract with her husband has been removed by statute, a married woman may enter into partnership with her husband. Bernard v. Packard, 64 Fed. 309. From the evidence we are of the opinion that the grocery store and printing shop were their joint enterprises. Each spouse invested capital in the initial undertaking. There is no evidence that the wife advanced her money to petitioner as a loan or as a gift. Both contributed services to both businesses. The evidence is that petitioner and his wife agreed to work as partners. The profits made from their joint enterpi’ises went towards the acquisition of a one-fourth interest in the Lucas Coal Co., which became their joint property. One-half of the earnings from this interest in the Coal Company belonged to petitioner’s wife. We conclude that the Commissioner erred in including more than one-eighth of the earnings of that company in petitioner’s income.

It was alleged in the petition and admitted in the answer that the Commissioner erroneously excluded from income of the petitioner T'rf per cent of the net profits of the Kelley Brothers Coal Co. for 1920. This error should be corrected in the recomputation.

Decision will be entered accordingly on 15 days’ notice, under Rule 50.

Considered by Marquette, Milijken, and Van Fossan.  