This is an appeal from the determination of a deficiency in income and profits taxes in the amount of $1,297.82 for the calendar year 1921.
The Commissioner found the deficiency on the theory that that part, of the price for which certain land was sold in 1921 which was in excess of the value at which the land was entered on the taxpayer’s-books at the time' of acquisition in 1912 represented a taxable profit.. The taxpayer contends that the amount entered on its books did not represent the full value of the land and that its value at March. 1, 1913, was in excess of such amount.
From the pleadings and the oral evidence introduced at the hearing the Board makes the following
FINDINGS OP PACT.
1. The taxpayer is a California corporation with its legal office-at Oakland and its principal office at Sari Francisco.
2. J. F. Cross, the former owner of the 154y2 acres of land here-involved, died on October 27, 1910. The heirs of Cross formed the-taxpayer corporation and assigned their interest in the land thereto.. In April, 1912, the taxpayer issued its capital stock to the heirs in-exchange for their interests.
3. The land thus acquired was entered on the taxpayer’s books at: $40 per acre, in the total amount of $6,180. Depreciation on improvements was taken in subsequent years and at the time of the-sale in 1921 the land was carried on the books at $4,780.
4. The land was sold on May 12, 1921, for approximately $90 per-acre, or a total of $13,962.10.
5. The land here involved had a fair market value as of March 1,. 1913, of $90 per acre.
DECISION.
The deficiency determined by the Commissioner is disallowed.
Arijndell not participating.