Court Opinion

ID: 4597898
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:20:08.536822+00
Date Added: 2024-06-11T07:59:21.337352
License: Public Domain

APPEAL OF WALTER D. BROWNELL.Brownell v. CommissionerDocket No. 4937.United States Board of Tax Appeals4 B.T.A. 1191; 1926 BTA LEXIS 2049; September 29, 1926, Decided *2049 Charles H. Eden, Esq., for the petitioner.  John D. Foley, Esq., for the Commissioner.  LOVE *1191  LOVE: This is an appeal from the determination of deficiencies for the years 1919 to 1921, inclusive, in the sum of $1,381.41.  The deficiencies arose from the refusal of the Commissioner to allow deductions for exhaustion of certain leaseholds.  FINDINGS OF FACT.  The petitioner is an individual and was engaged in the business of buying and selling leaseholds at Providence, R.I. Prior to March 1, 1913, he acquired three leaseholds, one of which was known as "Butts Estate," terminating January 1, 1920; one of which was known as "Crowell Building," terminating May 1, 1929; and one of which was known as "Wood Estate," terminating September 1, 1949.  The leaseholds in question were appraised as of March 1, 1913, by William H. Draper and James H. Hurley, expert real estate appraisers, as follows: Leasehold.Draper.Hurley.Butts estate, 1/2 interest, 6 years 10 months$8,111.25$8,198.75Crowell Building, 36 years, 6 months to run58,465.2558,888.75Wood estate, 16 years, 2 months to run26,026.7525,551.00*1192 *2050  On March 1, 1913, the value of the several leaseholds was as follows: Butts estate$8,111.25Crowell Building58,465.25Wood estate26,026.75The petitioner in his income-tax returns for 1919, 1920, and 1921, deducted as exhaustion on the leaseholds, as follows: 1919.1920.1921.Butts estate$1,000Expired.Expired.Crowell Building1,000$1,000$1,000Wood estate1,0001,0001,000The Commissioner refused to allow any exhaustion on the leaseholds on the theory that leaseholds are not subject to deductible exhaustion.  The proper exhaustion on the several leaseholds is as follows: Butts estate$1,187.00Crowell Building1,601.78Wood estate1,609.90Order of redetermination will be entered on 15 days' notice, under Rule 50.