*75OPINION.
Smith: The question presented by this appeal is the value of the merchandise inventory of the Lester Live Stock & Grain Co., conducted by the decedent as a sole proprietorship, at the date of the death of the decedent, namely, March 28, 1920. Prior inventories of this business had been taken by the petitioner, the executor of the will of the decedent. He took no inventory at or about March 28,1920. An inventory was, however, taken by five appraisers under *76the direction of the court and they reached a value of the inventory of merchandise as of that date of $15,843.19. On behalf of the taxpayer it is claimed that this inventory should be used in determining the amount of the loss actually sustained by the business from January 1 to March 28, 1920. The Commissioner contends, however, that he has never permitted the establishment of the market value of inventories by means of an appraisal, as is contended for in this appeal; that in article 1584 of Eegulations 45 (1920 edition) it is stated that under ordinary circumstances “ market ” means the current bid price prevailing at the time of the inventory for the particular merchandise in the volume in which ordinarily purchased by the taxpayer, and is applicable in the case of goods purchased and on hand; that it is also required that the taxpayer show both the cost and the market price of the article included in the inventory; that no effort has been made by the petitioner to show even approximately what it might have cost the petitioner to replace this inventory as of March 31, 1920.
At the hearing it was stipulated by both parties that the merchandise inventory at January 1, 1920, was $32,863.31. This was the amount shown by the return of the decedent on December 31, 1919. It was proven at the hearing that the merchandise inventory taken by the five appraisers as of March 31, 1920, was $15,843.19. Apparently in every case this inventory was valued at less than the cost, and from the evidence it would appear that the prices placed upon the merchandise appraised was the full market value. We are of the opinion, in view of the stipulation made by the parties, that the income-tax liability of th& decedent for the period January 1 to March 28,1920, should be determined upon the basis of a value of the merchandise inventory of the Lester Live Stock & Grain Co. at March 28, 1920, of $15,843.19.
Order of redetermination will he entered on 15 days' notice, under Rule 50.