Court Opinion

ID: 4510304
Source: CourtListenerOpinion
Date Created: 2020-02-25 20:41:58.568993+00
Date Added: 2024-06-11T12:13:27.121149
License: Public Domain

Walter E. Barton, Esq., for the petitioner.

Leroy L. Hight, Esq., for the respondent.

MORRIS: This proceeding is for the redetermination of deficiencies in income tax of $233. 14 and
$15.68 for the years 1925 and 1926, respectively. The issues presented are (1) whether the
respondent erred in finding that the petitioner realized income in the taxable years as the
result of the construction by lessees of a certain building on premises owned by and leased to
said lessees by the petitioner and Helen A. Baxter for a period of 20 years, beginning on May 1,
1920, and ending on April 30, 1939; (2) if the respondent did not so err, whether he erred in
computing said taxable income by using a rate of depreciation of 2 per cent on said building
instead of a rate of 3 per cent. On the first issue it is the position of the petitioner that he
realized no income as a result of the construction by the lessees of said building prior to the
expiration of the lease.

The questions herein involved were raised by the same petitioner in a prior proceeding for prior
years. Counsel for the respective parties filed the following stipulation in this proceeding

It is hereby stipulated and agreed by and between the parties hereto that the decision of the
Board in the above-entitled appeal shall be governed and controlled by the decision of the Board
in the appeals of Joseph L. B. Alexander, Docket Numbers 14360 and 17474, and Grace M. Alexander
, Docket Numbers 14359 and 17829. Both parties hereto reserve their right to appeal the decision
in Docket No. 39846 pursuant to the statute in such cases made and provided.

The decision of the Board in the proceedings therein referred to was promulgated October 23, 1928
, 13 B. T. A. 1169 . In that decision we held that the respondent was correct in finding that
income accrued to the petitioners upon the erection of the improvements upon the realty, and that
pursuant to the regulations an aliquot part thereof might be reported for each year of the lease.
We further held that the only evidence offered by the petitioners upon the depreciation question
was with respect to the manner of construction of the improvements, from which we were unable to
find that the rate used by the respondent was incorrect.

In view of the stipulation filed in the instant proceeding and the decision reached in the
proceedings therein referred to

Judgment will be entered for the respondent.