Opinion ID: 1506221
Heading Depth: 1
Heading Rank: 3

Heading: Accrued Taxes on Lands Acquired.

Text: Accrued taxes and assessments upon lands acquired by the taxpayer and paid by it subsequent to acquisition we think were not taxes paid during the taxable year exclusively upon or with respect to the real estate owned by the company within the meaning of the act. Revenue Act 1928, § 203 (a) (6), 26 USCA § 2203 (a) (6). These taxes were assessed and had become liens upon the lands while in other ownership. The taxpayer took them subject to the lien of the taxes. The liens were in a sense a part of the capital expenditures for the acquisition of the lands, and hence they did not, in a proper sense, pertain to the investment expenditures of the company to be used in determining net income. These taxes stand on an entirely different basis than taxes on real estate accruing after acquisition. Leamington Hotel Company v. Commissioner, 26 B. T. A. 1004; First Bond and Mortgage Company v. Commissioner, 27 B. T. A. 430; Grand Hotel Co. v. Commissioner, 21 B. T. A. 890; Texas Coca-Cola Bottling Company v. Commissioner, 30 B. T. A. 736.