Court Opinion

ID: 4623099
Source: CourtListenerOpinion
Date Created: 2020-11-21 02:52:13.532731+00
Date Added: 2024-06-11T07:56:18.111912
License: Public Domain

BISMARK REALTY CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Bismark Realty Co. v. CommissionerDocket No. 9097.United States Board of Tax Appeals12 B.T.A. 677; 1928 BTA LEXIS 3480; June 18, 1928, Promulgated *3480  Respondent's determination of invested capital sustained.  Nathan D. Shapiro, Esq., for the petitioner.  J. L. Deveney, Esq., for the respondent.  ARUNDELL*677  ARUNDELL: The respondent found a deficiency of $205.88 in income and excess-profits taxes for the year 1919, in connection with which it is claimed he erred in the computation of invested capital for 1918.  FINDINGS OF FACT.  The petitioner, a New York corporation, with principal offices at 50 Court Street, Brooklyn, N.Y., was organized in 1910 with a capital stock of $1,000.  Its activities were confined almost exclusively to the purchase and sale of real estate.  The books of account of the petitioner consisted of cards on which entries were made for each purchase of property.  At December 31, 1917, the petitioner owned eight pieces of real estate.  The cost of, and outstanding mortgage, on each property, together with the petitioner's equity therein at the close of 1917, were as follows: PropertyCostMortgageEquity104-A Somers Street$5,250$4,000$1,250171-3 Rochester Avenue7,5004,0003,500360 to 363 Broadway28,42517,00011,425706 Willoughby Avenue18,65015,0003,650890 Broadway13,92511,5002,4252111 Dean Street10,1006,7503,3501974 Eastern Parkway33,60021,75011,850643 Madison Street (acquired in exchange)2,200*3481 *678  In the year 1917 the petitioner made a profit of $544.  "Loans payable" at the close of 1917 amounted to $7,694.60.  Respondent's determination of invested capital for the year 1919 was absed on invested capital at January 1, 1918, of $18,655.40.  Judgment will be entered for the respondent.