*314opinion. •
Smith: The sole question in this appeal is whether the taxpayer, a corporation organized during the year 1918, and having a net income for that year, is entitled to deduct from that net income, under the provisions of section 204 of the Revenue Act of 1918, a net loss sustained for the calendar year 1919. The Commissioner has disallowed the deduction upon the ground that the taxpayer was not in existence for a full twelve-month period prior to December 31, 1918. The taxpayer claims the right to make the deduction under the law as interpreted by this Board in Appeal of Carroll Chain Co., 1 B. T. A. 38. The Commissioner cites Appeal of Butler's Warehouses, Inc., 1 B. T. A. 851, in support of his contention.
The salient fact in the decision in Appeal of Butler's Warehouses, Inc., supra, was that it was incorporated January 17, 1919, and that it had no- corporate existence during the year 1918. In the course of the opinion in that appeal it was stated:
If the taxpayer had been incorporated and had been engaged in business during the calendar year 1918, there is no doubt but that a net loss which was sustained by it during the calendar year 1919 could have been deducted from the net income of the year 1918, and the excess of the net loss could be deducted from the gross income of the year 1920. The taxpayer was not, however, in existence during the year 1918, and the question arises as to whether its situation is any different from what it would have been if it had been in existence during that year.
*315The decision of the Board was1 that, inasmuch as it was not in existence during any part of 1918, it could not by any possibility have a net income for 1918 against which a net loss for 1919 could be applied.
The material question in this appeal is whether the term “ taxable year,” as contained in section 204 (b) of the Revenue Act of 1918, is to be construed as requiring the legal existence of a corporation for a twelve-month period. This is precisely the question that was decided in the Appeal of Carroll Chain Co., supra, under a similar definition of taxable year contained in the Revenue Act of 1921. We think that it was immaterial that the taxpayer was in existence for only a fractional part of the year 1918. It is entitled to have the net loss sustained by it for the year' 1919 applied against the net income for the fractional part of the year 1918 during which it was in existence.
In its petition the taxpayer alleges that the net loss sustained by it during the calendar year 1919 was in excess of the net income received by it from March 25 to December 31, 1918, inclusive, and, although the Commissioner admits that the taxpayer filed a return for 1919 which showed a net loss, the amount thereof was not admitted and the taxpayer has submitted no proof upoir the point. Whatever the amount of the net loss was, it should be applied against the net income of the period ended December 31, 1918, and the balance, if any, against the net income for the year 1920. Appeal of Patapsco Ballast Co., 1 B. T. A. 1081.