reasonable compensation

In December 1927, the taxpayer contemplated trading in the stock market during 1928 after deciding that conditions were favorable. He consulted a lawyer who advised that it was possible for him to trade in trust for his children and other members of his family. He stated to them that he declared a trust of his stock trading during 1928 for the benefit of his family. Taxpayer agreed to assume personally any losses resulting from the venture, and to distribute the profits, if any, in equal shares to his wife, mother, and two minor children after deducting a reasonable compensation for his services. The taxpayer’s two children were one and three years of age at the time. During 1928 the taxpayer carried on the trading operations contemplated. At the end of the year he determined his compensation at slightly less than $10,000, which he reported in his income tax return for that year. The profits remaining were then divided in approximately equal shares among the members of his family, and the amounts were reported in their respective tax returns for 1928. The amounts allocated to the beneficiaries were credited to them on the taxpayer’s books, but they did not receive the cash except to a small extent in the case of the taxpayer’s mother. The Board of Tax Appeals held that the income in controversy was taxable to the petitioner as a part of his gross income for 1928 and decided that there was a deficiency. The petitioner seeks review of that decision in this court.