14 T.C. 934">*934 The Commissioner determined the following deficiencies in the petitioner's tax returns for1950 U.S. Tax Ct. LEXIS 189">*191 the stated years:

Certain minor adjustments in the petitioner's business income have been conceded by the petitioner. The petitioner is the administrator of the estate of his deceased wife. The only question for decision is 14 T.C. 934">*935 whether the net income derived from the decedent's one-half of community property during the years 1941 to 1944, inclusive, is taxable to the estate under section 161 (a) (3) of the Internal Revenue Code, or to petitioner. During the years involved in this proceeding, the estate was still in process of administration in the Superior Court of California for Kern County.

Petitioner filed his income tax returns for the years 1941 to 1944 with the collector for the sixth district of California.

FINDINGS OF FACT.

The facts which have been stipulated are found as facts and the stipulation of facts is incorporated herein by this reference. The facts necessary for an understanding of the question presented are as follows:

Petitioner is a resident of Delano, Kern County, California. During the year 19301950 U.S. Tax Ct. LEXIS 189">*192 petitioner married Vinka Caratan. She was his wife at the time of her death. At all times after their marriage, the petitioner and his wife resided together in California. Vinka Caratan, hereinafter called the decedent, died intestate on September 13, 1939. She was survived by petitioner, two sons and a daughter.

The estate of the decedent was admitted to probate by the Superior Court of California for Kern County, and the petitioner was duly appointed the administrator of the estate on February 21, 1940. However, final distribution of the estate was not made until October 19, 1946. During the years in question, the estate was in process of administration.

At the time of the decedent's death she and petitioner owned community property; the decedent did not own any separate property. Among the items of community property was real property in Kern County consisting of 360 acres of land known as the Cecil Avenue Vineyard. This property was acquired by petitioner and his wife in 1934 with moneys earned subsequent to their marriage. Legal title to this property was taken in the name of Marin Caratan and Vinka Caratan, husband and wife, as community property.

Shortly after the 1950 U.S. Tax Ct. LEXIS 189">*193 death intestate of his wife, petitioner employed the law firm of Borton, Petrini, Conron & Borton, hereinafter called Borton, to settle the estate of the decedent. ¹ Borton asked the Bakersfield 14 T.C. 934">*936 Abstract Co., which is engaged in the business of searching and insuring title to real property in Kern County, whether it would issue a title insurance policy insuring title to the Cecil Avenue Vineyard as vested in Marin Caratan. The abstract company advised Borton, by letter dated February 1, 1940, as follows:

It is our opinion that, before we would insure the title to said property as vested in Marin Caratan, proper proceedings must be had to probate the estate of Vinka Caratan, deceased.

1950 U.S. Tax Ct. LEXIS 189">*194 In February, 1940, Caratan filed a petition in the Superior Court of Kern County requesting probate of the estate of Vinka Caratan, deceased, and requesting that he be appointed administrator. On February 21, 1940, the Superior Court issued its order for the probate of the estate and letters of administration appointing petitioner the administrator. On October 21, 1940, Caratan filed an inventory and appraisement of the properties, and on June 11, 1941, he filed an amended inventory and appraisement. In the original and the amended inventory the assets of the estate consisted of community property, as follows: The decedent's one-half interest in the Cecil Avenue Vineyard and in another piece of real property, her one-half interest in the grape crops on the real property, her 22.357 per cent interest in the value of a trust estate, and her one-half interest in cash on hand at the date of her death, all having a total value of $ 127,122.81. Neither the original nor the amended inventory listed any separate property.

On October 3, 1946, Caratan filed an "Amended First and Final Account, Report and Petition for Distribution of the estate." In the account to the Superior Court, petitioner1950 U.S. Tax Ct. LEXIS 189">*195 reported that one-half of the net income derived from the decedent's one-half of the community property during the period of the administration amounted to $ 205,538.78.

On October 19, 1946, the Superior Court issued its "Order Settling Final Account and Decree of Distribution," under which Caratan, as administrator, distributed all the property to himself as the survivor of the community.

According to the final account of the administrator, the value of the estate at the date of death was $ 127,122.81, consisting of cash, $ 16,032.77; one-half interest in grape crops, $ 17,000; 22.357 per cent of a trust, $ 17,377.54; one-half interest in realty, $ 8,000; and one-half interest in Cecil Avenue Vineyard, $ 68,712.50. The expenses of the estate were as follows: Funeral expenses, $ 525; allowed claims, $ 2,065.44; Federal estate tax, $ 6,918.51; California inheritance tax, $ 176.88; and attorney's fees and administration expenses as of October, 1946, $ 4,852.62.

During the period of administration of the estate, from 1939 to August 31, 1946, the gross income of the estate was $ 645,428.76. Income 14 T.C. 934">*937 taxes of the estate, Federal and state, amounted to $ 440,558.38. The net receipts1950 U.S. Tax Ct. LEXIS 189">*196 of the estate amounted to $ 204,870.38. During the fiscal years of the estate ending on August 31, gross income was as follows:

No distributions of property or earnings of property in the estate were made to the petitioner as the survivor of the community interest or as heir, or to anyone else, during the period the estate was in process of administration. No distributions were made except pursuant to the court's decree.

During the period of his marriage to Vinka Caratan, petitioner owned as his separate property approximately 220 acres of land in Kern County, known as the Home Vineyard, which was contiguous to the Cecil Avenue Vineyard. The two properties were both planted with grape vines and had been operated together as a vineyard prior to the death of Vinka Caratan, and the joint operation of the properties by the petitioner was continued during the period the estate of Vinka Caratan was in process of administration.

The net income of the estate of Vinka Caratan was computed on the basis of the fiscal year commencing on September 1 and ending on August 31, and the income tax returns of1950 U.S. Tax Ct. LEXIS 189">*197 the estate were made on that basis. Petitioner computed his income and filed his income tax returns on the calendar year basis.

During all of the years herein involved, except 1941, the income from the operations of said properties and the depreciation on equipment used on both properties were allocated between the properties at the ratio of 30 per cent to the Home Vineyard and 70 per cent to the Cecil Avenue Vineyard. For the year 1941 the income and expenses were allocated at the ratio of 29.55 per cent to the Home Vineyard and 70.45 per cent to the Cecil Avenue Vineyard.

In his income tax returns for the years 1941 to 1944, inclusive, petitioner reported all of the income allocated to the Home Vineyard as his separate income and one-half of the income allocated to the Cecil Avenue Vineyard as his community one-half of the net income from that property. The remaining one-half of the net income allocated to the Cecil Avenue Vineyard for each of said years was reported in the income tax returns filed for the estate of Vinka Caratan as the estate's community one-half of the income from that property.

During the year 1941 the sum of $ 9,000 was received as a bonus for an oil lease1950 U.S. Tax Ct. LEXIS 189">*198 of the Cecil Avenue Vineyard. One-half of that sum was reported in the income tax return of petitioner for the year 1941 and one-half was reported in the income tax return filed for the estate of Vinka Caratan, deceased.

14 T.C. 934">*938 In the notice of deficiency the respondent gave the following explanation for his determination:

Net income reported in the returns filed for the Estate of Vinka Caratan is included in your income since it was realized from Vinka Caratan's interest in community property the ownership of which automatically vested in you upon her death intestate on September 13, 1939.

OPINION.

There is no dispute about any of the facts. The only question is whether the net income of the estate during the years in question is taxable to the estate, or to the petitioner.

Under section 161 (a) (3) of the Internal Revenue Code, ² income received by the estate of a deceased person is taxable to the estate during "the period of administration." The later phrase has been construed by the Commissioner to mean "the period required by the executor or the administrator to perform the ordinary duties pertaining to administration, in particular, the collection of assets and the payment1950 U.S. Tax Ct. LEXIS 189">*199 of debts and legacies. It is the time actually required for this purpose, whether longer or shorter than the period specified in the local statute for the settlement of estates." See Supplement, Regulations 111, p. 367; sec. 29.162-1. The above construction of section 161 (a) (3) is a valid and reasonable interpretation. "The question of what constitutes the period of administration of an estate 'is not a matter of local rules of property, but one where, under Burnet v. Harmel, 287 U.S. 103">287 U.S. 103, we must ascertain criteria for construction of an act of Congress, and if regulations on the subject are fairly and reasonably within the power of the Commissioner, we should look to such regulations.'" See Estate of J. P. Armstrong, 2 T.C. 731, 734.

1950 U.S. Tax Ct. LEXIS 189">*200 The substance of the respondent's contention is that the period of administration of the estate should not be recognized; that the income thereof should be held to be taxable to the petitioner, even though there was no distribution of the estate to him until October, 1946. The respondent's contention is correct in part, but we find no merit in part of the contention, which will be discussed hereinafter. The first aspect of the question is whether "the time actually required" for the administration of the estate, i. e., for the collection of the assets and the payment of debts and legacies was less than the period from the appointment of an administrator until the Superior Court's order of distribution in October, 1946.

The decedent died on September 13, 1939. Although the final account 14 T.C. 934">*939 of the administrator reported that there were allowed claims against the estate in the amount of $ 2,065.64, these are not explained, and we must take into consideration the statutory provisions of sections 167 and 171 of the California Civil Code that the community property is not liable for the debts of the wife contracted after marriage unless secured by a pledge or mortgage executed1950 U.S. Tax Ct. LEXIS 189">*201 by the husband; and, although the separate property of the wife is liable for her debts, the decedent did not possess any separate property at the time of her death, according to the administrator's final account. Also, under section 203 of the probate code, forty days after the death of the wife the surviving husband shall have the power to sell, mortgage, and dispose of real property in the community property, unless notice is recorded that an interest is claimed by another under the wife's will. Here, the deceased wife did not leave a will. From the above, it appears at once that there would seem to be little reason for a prolonged administration of the estate of the petitioner's deceased wife. As far as we can determine, the only things which the petitioner had to do as the administrator of the estate were to pay expenses and debts and Federal and state inheritance taxes, and put the estate through administration to satisfy the requirements of the Bakersfield Abstract Co. before it would issue a policy of title insurance, the reasons for which requirement were not made clear under the stipulation of facts. Under section 1000 of the probate code, at any time after four months1950 U.S. Tax Ct. LEXIS 189">*202 from the issuing of letters of administration, the administrator, or heirs, or a successor in interest may petition the court to distribute any portion of the estate. Under section 1001 of the probate code, if it appears at a hearing that the estate is but little indebted and that all inheritance taxes payable have been paid, the court shall make an order requiring the administrator to deliver such portion of the estate as the court may direct, and the court may dispense with the filing of a bond. Under section 956 of the probate code, if all debts have been paid under the first order, the court must direct payment of legacies and direct distribution of the estate; and administration of the estate may continue only for such time as may be reasonable if debts remain unpaid, or if, for other reasons, the estate is not in a condition to be closed.

The petitioner was appointed administrator on February 21, 1940; the Federal estate tax return became due December 13, 1940; and the first or original inventory and appraisement was filed with the Superior Court on October 21, 1940.

The evidence shows that the expenditures which the petitioner made were as follows: Funeral expenses, $ 1950 U.S. Tax Ct. LEXIS 189">*203 525; allowed claims, $ 2,063.65; Federal estate tax, $ 6,918.51; state inheritance tax, $ 176.88; total, $ 14,013.65. Also, it shows that the one-half of the cash in the community property at the date of death was $ 33,032.77. That amount 14 T.C. 934">*940 included $ 17,000 representing one-half of the value of a grape crop at the date of death, but we may reasonably assume that the proceeds from the sale of the grape crop of the autumn of 1939 were received during 1939, or before the end of 1940. The cash in the estate was ample to cover the above disbursements. There were expenses of administration and attorney's fees which, when the estate administration was ended by court order in October, 1946, amounted to $ 4,852.62; but even those expenses could have been covered by the cash in the estate; and, furthermore, the net income of the estate amounted to $ 19,730 for the fiscal year of the estate ended August 31, 1940. The amended inventory and appraisement was filed June 11, 1941, but the change from the original inventory which it reported was slight.

The record before us fails to show that the petitioner, as the administrator, did anything in the administration of the estate after1950 U.S. Tax Ct. LEXIS 189">*204 December 31, 1940, other than file an amended inventory and the final account (which was not filed until October 3, 1946), unless the item of the conversion into cash of a "Trust deed and contract of sale" for $ 2,430.35 was done after December 31, 1940, which appears to have been a small item.

During the entire period from the date of death until the filing of the final account of the administrator the petitioner was operating the Cecil Avenue Vineyard, and one-half of the income from such operation was reported in the fiduciary return, as set forth in the findings of fact. It appears that this was the chief work of the administrator, but it was nothing more than he would have done if the estate had been distributed to himself. In view of the above facts, the provisions of the Civil Code and of the Probate Code of California which have been referred to above, the small amounts of expenses, debts or claims, and taxes, and the adequacy of the cash in the estate to meet all of these, coupled with the fact that the petitioner was the successor to the interest of his deceased wife in the community property, and that her estate consisted chiefly of her one-half interest in the Cecil 1950 U.S. Tax Ct. LEXIS 189">*205 Avenue Vineyard, which the petitioner operated, we think it is entirely reasonable and even resolves all doubts in petitioner's favor to conclude that the "time actually required" to perform the "ordinary duties pertaining to administration, in particular the collection of assets and the payment of debts," did not extend beyond August 31, 1941 (end of a fiscal year of the estate). See William C. Chick, 7 T.C. 1414; affd., 166 Fed. (2d) 337; certiorari denied, 334 U.S. 845">334 U.S. 845; cf. Caro du Bignon Alston, 8 T.C. 525. There is no evidence before us to show that the estate was not in condition to be closed on or about August 31, 1941.

The respondent's chief contention is that the income of the deceased wife's one-half of the community property is taxable to the petitioner, rather than to the estate, during the entire period of administration14 T.C. 934">*941 because her interest passed to him upon her death under the provisions of section 201 of the probate code. ³ Respondent relies upon Bishop v. Commissioner, 152 Fed. (2d) 389, which reversed1950 U.S. Tax Ct. LEXIS 189">*206 Stella Wheeler Bishop, 4 T.C. 588. The Bishop case does not support the respondent's contention; it did not deal with the same question which is presented here by the respondent's theory.

In the Bishop case, the Commissioner's determination which was challenged by a surviving wife related to her one-half of certain community property. She claimed in her personal income tax return deduction for one-half of a loss sustained on the sale of the particular property during the period of administration of the estate of the deceased husband. We need not restate the facts of the Bishop case, but the surviving wife's claim for a deduction of one-half1950 U.S. Tax Ct. LEXIS 189">*207 of the loss in question was sustained because her interest in one-half was vested in her from the date the property was acquired by the spouses as community property, sec. 161 (a), California Civil Code; and upon the death of her husband, it belonged to her, sec. 201, California Probate Code. See dissenting opinion, Stella Wheeler Bishop, supra, p. 591, et seq.

In this proceeding, petitioner's one-half interest in the community property was vested in him when it was acquired; sec. 161 (a), California Civil Code; and upon his wife's death, it belonged to him. Sec. 201, California Probate Code. Under section 161 (a) of the California Civil Code, a husband and a wife's respective interests in community property acquired after July 29, 1927, the effective date of the statutory provision, are "present, existing and equal interests," under the management and control of the husband. Bishop v. Commissioner, supra.

But in this proceeding, the question is not concerned with petitioner's one-half interest in community property. Rather, it relates to the passing of the one-half interest of the deceased wife. 1950 U.S. Tax Ct. LEXIS 189">*208 The question which was decided in the Bishop case was not concerned at all with the one-half interest in community property of the deceased husband which passed, or went to his surviving wife upon his death. The Bishop case is not in point, and it is unnecessary to discuss it beyond pointing out that it is distinguishable from the instant proceeding.

Generally speaking, the death of a person effects the passing of the title to property to heirs, devisees, and successors in interest, and this result obtains and exists in spite of and during the period of administration of an estate, which only postpones the taking of possession of property by the heirs or successors in interest. That is true of community property acquired by spouses in California, the title to which 14 T.C. 934">*942 is governed by section 161 (a) of the civil code, by virtue of section 201 of the probate code; and the interest in community property of the wife, as well as of the husband, is includible in her or his estate for Federal estate tax. Bank of America v. Rogan, 33 Fed. Supp. 183. Under section 300 of the California Probate Code, ⁴ "When a person dies, 1950 U.S. Tax Ct. LEXIS 189">*209 the title to his property, real and personal, passes to the person to whom it is devised or bequeathed * * *, or, in the absence of such disposition, to the persons who succeed to his estate * * *." Section 161 (a) (3) of the Internal Revenue Code, in recognizing the estate of a deceased person as a taxable entity during the period of administration, is not opposed to or in conflict with the above concept. Section 161 (a) (3) of the Internal Revenue Code relates to the period during which possession of property is in an executor or administrator, prior to distribution to the successors in interest, or heirs.

1950 U.S. Tax Ct. LEXIS 189">*210 Respondent advances the theory that the estate of a deceased wife may not become, or is not, subject to administration under California statutes when it consists only of her interests in community property because, upon her death, her interest passes to her husband. This is an original and novel theory. No authority is cited in its support. Section 300 of the probate code begins, "When a person dies." The term "person" includes both the female and the male person. The adjective "his," in section 300, must mean, therefore, "his" or "her," and, therefore, the provision which states "but all his property shall be subject to the possession of the executor or administrator and to the control of the superior court," must include the property of a deceased woman, even though the adjective "his" is used. When the antecedent of "his" is "a person," the word "his" is understood to include "her."

For the above reasons, we find no merit in respondent's theory that section 161 (a) (3) of the Internal Revenue Code should not apply to the estate of the deceased wife of the petitioner. There appears to have been some necessity for having the estate go through administration1950 U.S. Tax Ct. LEXIS 189">*211 by the Superior Court. Competent counsel had advised petitioner that the Bakersfield Abstract Co. would not issue a policy of title insurance on certain real property unless there was administration of the estate, and there were matters to be done by an administrator. Nothing before us justifies a conclusion that the estate was not properly subject to administration, to the possession of the administrator who 14 T.C. 934">*943 was appointed, and to the control of the Superior Court which admitted it to probate. The fact that the estate involved in this proceeding is that of a deceased wife does not, in our opinion, distinguish this proceeding from Estate of B. Brasley Cohen, 8 T.C. 784, 787; and Estate of Isadore Zellerbach, 9 T.C. 89, 95; affd. per curiam, 169 Fed. (2d) 275; certiorari denied, 335 U.S. 903">335 U.S. 903, where the estates were those of deceased husbands, on the point that the income of real estate held by an executor or administrator is, during the period of the administration of the estate of a deceased resident of California, taxable to the estate under section1950 U.S. Tax Ct. LEXIS 189">*212 161 (a) (3) of the Internal Revenue Code. Therefore, the following observation in Zellerbach's Estate, supra, p. 95, applies in this proceeding:

Although section 300 of the California probate code provides that title to the property of a deceased person passes to his heirs, devisees, or legatees, it also provides that the title so passes "subject to the possession of the executor or his administrator and to the control of the superior court for the purpose of administration, sale or other disposition" * * *.

And in the Cohen case, we made the observation that we believed it could not be argued seriously that the estate was not under administration. Here, we think it can not be argued seriously that the estate of the decedent was not under administration at least for a short period.

It is concluded, therefore, that the estate of the petitioner's deceased wife comes within the scope of section 161 (a) (3) of the Internal Revenue Code, and the respondent's contention to the contrary is rejected. The question is then narrowed to whether the "period of administration or settlement of the estate" extended throughout the years 1941 through 1944 (the1950 U.S. Tax Ct. LEXIS 189">*213 years involved here), or was for a shorter period. That question has been disposed of under our holding above that the period actually required for administration of the estate ended on August 31, 1941.

Decision will be entered under Rule 50.