*1206OPINION-.
James:The taxpayer contends that it is entitled to have its invested capital measured by the capital stock of the company operated for 19 years in Missouri. But the taxpayer is not the Missouri corporation; it is the successor New York corporation. So far as the taxpayer here is concerned, its capital stock was issued for tangible property paid in in the amount stated in the findings of fact. We find nothing in the law which warrants the conclusion that Congress intended to ignore corporate reorganizations or to measure the invested capital of existing taxpayers by the invested capital of corporations which have ceased to exist. On the contrary, Congress saw fit to incorporate in the Revenue Act of 1918 one specific provision dealing with the invested capital of corporations which were the result of reorganizations, namely, section 331. That section definitely denies to successor corporations an invested capital in excess of the invested capital of their predecessors merely to protect against reorganizations in fraud of the revenue. In so doing, Congress must be recognized as intending that all other reorganizations would compute their invested capital solely from their own transactions.
This action of Congress is the more significant in the light of the provisions of section 202 (b) of the Revenue Act of 1918, in which it is provided:
When property is exchanged for other property, the property received in exchange shall for the purpose of determining gain or loss be treated as the equivalent of cash- to the amount of its fair market value, if any; but when in connection with the reorganization, merger, or consolidation of a corporation a person receives in place of stock or securities owned by him new stock or securities of no greater aggregate par or face value, no gain or loss shall be deemed to occur from the exchange, and the new stock or securities received shall be treated as taking the place of the stock, securities, or property exchanged.
It thus appears, that, while the individual stockholders of the Missouri corporation may not deduct a loss on account of the conversion of their stock into an amount of stock of a less par value in the taxpayer corporation, Congress, nevertheless, failed to provide anywhere in the Revenue Act of 1918 that the invested capital of the taxpayer in a case of this sort should be computed upon the basis of its predecessor. We can not supply what Congress saw fit to omit.
The deficiency is Sift®.®®. Order will be entered accordingly.