with the above New York statute. The petitioner claimed an income tax deduction for each of those years only to the extent that the commissions paid in each year were allocable to taxable income pursuant to the provisions of sections 23 (a) (2) and 24 (a) (5) of the Internal Revenue Code of 1939, as amended. On January 4, 1949, the petitioner terminated the trust agreement and paid to the trustee "commissions from principal" in accordance with the provisions of the above New York statute in the amount of $15,493.84. The total valuation of the trust principal at that time was $765,692. The trustee waived "commissions from the income" for the period January 1 through January 4, 1949. Of the total valuation of the trust corpus at its termination, 63.4864 per cent thereof consisted of securities, the income from which would be included in gross income and subject to taxation under the provisions of section 22 (a) of the Internal Revenue Code of 1939, and 36.5136 per cent thereof consisted of securities the income or interest from which would be excluded from gross income and exempt from taxation under the provisions of section 22 (b) (4) of said Code. In her Federal income tax return for 1949, petitioner reported the amount of $1,330.75 as her income from the trust during that year. Also in that return she claimed a deduction in the amount of $9,836.48 for "Trustee's Commissions." This amount was computed to be 63.4864 per cent of the total "commission from principal" which was allocable to securities producing taxable income. In her petition to this Court, petitioner claimed that she was entitled to deduct the entire amount of the "commissions from principal" paid by her to the trustee in 1949. Section 23 (a) (2) of the Internal Revenue Code of 1939, as amended, provides for the deduction for expenses paid "for the production or collection of income or for the management, conservation, or maintenance of property held for the production of income." The respondent does not question the fact that the commissions would be deductible under the provisions of section 23 (a) (2) if it were not for the effect thereon of section 24 (a) (5) which provides that no such deduction shall be allowed in respect of any amount which is "allocable" to wholly exempt income or interest. Petitioner faces the burden of establishing that commissions in excess of the amount deducted on her income tax return are not within the limiting provisions of section 24 (a) (5). Petitioner contends that the amount of the 1949 commissions was paid solely for the trustee's management, conservation, and maintenance of the trust principal; that any income resulting from these investment activities would be capital gain and taxable whether the particular investments themselves produced taxable or exempt income; and that therefore the entire amount of the 1949 commissions is "allocable" to taxable income, and thus deductible. The stipulation contains nothing to indicate that capital gains were realized during the taxable year in question, or that the commissions were in fact based upon any such capital gains. Having assumed that the commissions in question were paid solely for the trustee's services in management, conservation, or maintenance of trust principal, petitioner further reasons that the limiting provisions of section 24 (a) (5) apply solely to expenses paid for production or collection of income, and not to expenses for management, conservation, or maintenance. From the factual standpoint, petitioner assumes that all of the 1949 commissions, having been paid out of principal, must, under the New York statute, be deemed to have been paid solely for management, conservation, or maintenance services. The stipulation presents no facts establishing the services rendered by the trustee and offers no support for the contention that the commissions paid in 1949 were solely for management, conservation, or maintenance, except by reference to the New York statute. Petitioner's contention must therefore stand or fall upon the construction of the New York law. Our examination of section 1548 of the New York Civil Practice Act (of which we take judicial notice), in the light of decisions reflecting upon its construction, convinces us that it fails to support petitioner's contention. It provides that commissions such as those here involved are payable out of principal, at rates prescribed in the act, for "receiving and paying out" sums of money constituting principal. It provides also for commissions from income, and annual additional commissions from principal. We think it quite clear that the substantial commissions, payable from principal, provided for "receiving and paying out" sums of money are not based solely upon the simple functions of such receiving and paying. The measure of the commissions so provided is merely part of the over-all plan, to be taken together with commissions from income and annual commissions from principal, to provide for total adequate compensation to trustees for all services of every kind rendered by them in accordance with the policy of the State. This view is supported by the decisions to which reference will be made infra. The significant factor to be noted at this point, however, is that, while we think it obvious that the commissions here paid were not merely paid for receiving and paying money, it is equally obvious that we cannot assume (and the language of the statute does not suggest) that they were paid solely for management, conservation, or maintenance of trust property. The appropriate concept of the attribution of commissions, whether paid from income or principal, to the sum of all services by the trus tee (in the absence, of course, of proof of express allocation to particular services) is clearly expressed by Judge Kern in Harry Civiletti, 3 T. C. 1274, 1276, affd. (C. A. 2) 152 F. 2d 332, as follows: But we do not derive, either from the statute or from the many cases construing it, that a trusteeship is any the less a single trust or that the compensation, however it may be computed or from whatever fund paid, is not the compensation which the trustee receives for his personal services as such. There is one appointment, one trust, one employment. The services required of a trustee often consist of a variety of acts and functions, but his trust does not thereby fall apart into so many disconnected pieces, each separate from all the others, and separately compensable. That this is true is indicated by the language appearing in In re Wolfe's Estate, 300 N. Y. S. 312, “Commissions are intended as compensation for service. While commissions are currently catalogued as receiving and paying out commissions, the actual fact is that the whole body of commissions is designed to be compensation for the whole body of administration of its trust estate." While this quotation was directed at a commission on principal, we think it is a sound conception of the fundamental theory involved here. A statutory arrangement fixing the measure and source of the compensation in a convenient and appropriate manner for administrative purposes does not alter that conception, and certainly can not be considered conclusive in the determination of Federal tax matters. Confirmation of this view is found in Smart v. Commissioner, (C. A. 2) 152 F. 2d 333, affirming this Court's Opinion in 4 T. C. 846. Although the case involved commissions allowed under New Jersey law, the Court's analysis of the underlying principles is here significant. The views of Judge L. Hand are expressed on page 335 as follows: It is of course often possible to divide a trustee's services into entirely separate parts. He may hold Whiteacre and Blackacre, and, not only keep separate accounts, but not devote any time to them in common. Perhaps it may be at times possible to say, even of the services given to a single parcel of property, that some are devoted exclusively to the production of the income, and the rest to the production and improvement of the principal. But ordinarily that is not even measurably true; the services of a trustee at once protect and improve the principal, and that protection and improvement in turn protect and increase the income; and their independent effect upon each cannot be disentangled. Except in rare instances, the only services which can truly be allocated to income as opposed to principal are those required actually to distribute earned income, relatively a trifling matter. When a court comes to award commissions to a trustee for his services, it does indeed divide the burden, because the services have inured to the benefit of both the life tenant and the remainderman, who for that reason ought to share the cost. But in so doing the court does not even impliedly try to separate the services into those which have benefited the income and those which have benefited the principal; on the contrary it divides the cost, either by some rule of thumb, statutory or judge-made, or according to the supposed benefit, or in some other of the ways which courts are accustomed to measure the incommensurable. Petitioner relies upon James H. Knox Trust, 4 T. C. 258, in urging a contrary view. A careful examination of that case discloses that the issue was whether or not a trustee's commission for receiving principal should be treated as a current expense or as a capital expenditure. We held that the commission should be treated as a current expense. We find that it is not determinative of the issues presented in the instant case. We think it is clear from the foregoing discussion that we cannot adopt the view that section 1548 of the New York Civil Pracice Act establishes the proposition that the commissions here paid were solely for management, conservation, or maintenance of trust property held for the production of income. As already pointed out, there is nothing else in the record from which we could reach such a conclusion. We are thus faced with a record in which there is no basis for determining what part of the trustee's commissions under consideration was paid for services for "the production or collection of income," and what part was paid "for the management, conservation, or maintenance of property held for the production of income." There is no foundation for apportionment by us in relation to the above categories (or, for that matter, in any other categories which may here be material). We have little doubt that the services were interrelated, and as such, in a practical sense, are allocable directly or indirectly to both categories. The burden of proof is, as previously pointed out, upon the petitioner. She does not question the fact that section 24 (a) (5) would be applicable as a limitation upon the deduction of expenses (here commissions) allocable to the production or collection of wholly exempt income or interest. Her burden of proof required her to establish either that none of the commissions which she now seeks to deduct is so allocable, or, at least, that a proportion thereof in excess of that which was the basis of the deduction on her income tax return is not so allocable. Upon the record, she has achieved neither result. It is thus unnecessary for us to consider whether or not the provisions of section 24 (a) (5) would have been applicable if petitioner had established the foundation of fact which would have been essential to its materiality. Reviewed by the Court. Decision will be entered for the respondent. LEON MANDEL AND CAROLINA PANERAI MANDEL, HIS WIFE, PETITIONERS, v. COMMISSIONER OF INTERNAL REVenue, RespondENT. Docket No. 40567. Filed October 18, 1954. 1. In 1948 and 1949, petitioner, Leon Mandel, made payments to his divorced wife exclusively for the support of his son and daughter. In the separation agreement pursuant to which the payments were made, petitioner undertook to provide an income for the children throughout their lives. He had the option of making such payments directly to them if they were married, or if, after reaching 21, they 2. Also in 1948 and 1949, petitioner, Leon Mandel, paid premiums Harry B. Sutter, Esq., and C. Ives Waldo, Jr., Esq., for the petitioners. Edward L. Newberger, Esq., for the respondent. This proceeding involves deficiencies in income tax of $9,527.79 for the year 1948 and of $8,153.48 for the year 1949 determined against Leon Mandel (hereinafter referred to as the petitioner) and Carolina Panerai Mandel, his wife. On August 4, 1952, petitioners consented to the assessment and collection of $6,962.07 of the total deficiencies asserted for the 2 years. The issues to be determined are: (1) Whether the amounts of $4,583.31 and $7,083.31 paid by petitioner in 1948 and 1949, respectively, to his former wife, Edna Horn (Mandel) Seligmann, pursuant to an agreement incident to a divorce from her, for the support of his children after they reached the age of 21, are includible in her income under section 22 (k) of the Internal Revenue Code of 1939 and deductible by him under section 23 (u)1; and (2) whether insurance 1 SEC. 22. GROSS INCOME. (k) ALIMONY, ETC., INCOME.-In the case of a wife who is divorced or legally separated from her husband under a decree of divorce or of separate maintenance, periodic payments (whether or not made at regular intervals) received subsequent to such decree in discharge of, or attributable to property transferred (in trust or otherwise) in discharge of, a legal obligation which, because of the marital or family relationship, is imposed upon or incurred by such husband under such decree or under a written instrument incident to such divorce or separation shall be includible in the gross income of such wife, and such amounts received as are attributable to property so transferred shall not be includible in the gross income of such husband. This subsection shall not apply to that part of any such periodic payment which the terms of the decree or written instrument fix, in terms of an amount of money or a portion of the payment, as a sum which is payable for the support of minor children of such husband. In case any such periodic payment is less than the amount specified in the decree or written instrument, for the purpose of applying the preceding sentence, such payment, to the extent of such sum payable for such support, shall be considered a payment for such support. Installment payments discharging a part of an obligation the principal sum of which is, in terms of money or property, specified in the decree or instrument shall not be considered periodic payments for the purposes of this subsection; except that an installment payment shall be considered a periodic payment for the purposes of this subsection if such principal sum, by the terms of the decree or instrument, may be or is to be paid within a period ending more than 10 years from the date of such decree or instrument, but only to the extent that such installment payment for the taxable year of the wife (or if more than one such installment |