*288OPINION.
Smith:The petitioner claims the right to deduct from its gross income for the fiscal year ended June 30, 1920, $2,863.44, for bad debts, in addition to an amount of $972.56 charged off its books of account and allowed as a deduction from gross income by the Commissioner as debts ascertained to be worthless and charged off within the taxable year. The claim of the petitioner is that the merchandise was sold during the fiscal year ended June 30, 1920, and that in truth the loss was sustained during that year.
Section 234(a) of the Revenue Act of 1918 permits a corporate taxpayer to deduct from gross income, inter alia:
(4) Losses sustained during the taxable year and not compensated for by insurance or otherwise;
(5) Debts ascertained to be worthless and charged off within the taxable year.
We think that the petitioner is entitled to claim a deduction for bad debts under subdivision (5) only of the statute above quoted. Deductions from gross income may be made only in accordance with 'the provisions of the statute. Claims for deductions as losses sustained may not be made in respect of bad debts. Electric Reduction Co. v. Lewellyn, 8 Fed. (2d) 91; 11 Fed. (2d) 493.
It may further be noted that the petitioner sold merchandise during the fiscal year ended June 30, 1920, on credit. In exchange for merchandise, it had an account receivable against the debtor. Until that account receivable has been ascertained to be worthless, *289the petitioner has sustained no loss. The evidence in the instant case shows that the accounts receivable in the amount of $2,863.44 in question were not ascertained to be worthless during the fiscal year ended June 30, 1920. There was therefore no loss sustained during that year in respect of the sales of merchandise, nor was there any bad debt ascertained to be worthless or charged off within the fax-able year. The amount was not a legal deduction from gross income in the tax return for the year ended June 30,1920.
Judgment will be entered for the Commissioner.
Steenhagen concurs in the result only.