*1983 Petitioner subleased certain property to another for a term of 20 years, and received during the taxable years the "sum of $20,000, being paid as a bonus for granting this sublease and being in addition to the rental." Held, that the entire amount should be included in petitioner's gross income for the taxable year.
*1026 This proceeding is for the redetermination of a deficiency in income tax for the calendar year 1923, in the amount of $2,545.59. The petition alleges that the respondent erred (1) in holding that an amount paid petitioner during the taxable year as a bonus for subleasing certain property was income to petitioner during that year, and (2) in making a certain adjustment for depreciation.
FINDINGS OF FACT.
Petitioner is a corporation organized and existing pursuant to the laws of the State of Louisiana, with its office and place of business in the city of New Orleans.
On February 14, 1922, petitioner leased from one S. Fertel certain premises known as 1036 Canal Street for a term of 24 months, commencing on October 1, 1922, and*1984 ending on September 30, 1924, at a rental of $410 per month. The lease contained a provision granting petitioner the right to sublease the premises in whole or in part.
On March 9, 1923, petitioner leased from the same party the same premises for a term of 20 years, commencing on October 1, 1924, and ending on September 30, 1944, at an annual rental of $24,000 during *1027 the first 10 years, and $27,000 during the last 10 years. This lease provided in part that "the Lessee shall have the right to sub-lease the above-mentioned premises."
On July 14, 1923, petitioner subleased the premises known as 1036 Canal Street, to one Edward H. Walsdorf for a term of 21 years, commencing on October 1, 1923, and ending on September 30, 1944, at an annual rental of $4,920 during the first year, $30,000 during the next 10 years, and $33,000 during the last 10 years. The sublease contained the following provision:
In consideration of the party of the first part [petitioner herein] granting this sub-lease, the said party of the second part, Edward H. Walsdorf, has presently paid over to the said party of the first part, represented as aforesaid, the sum of Twenty thousand ($20,000) *1985 Dollars, cash, receipt of which is hereby acknowledged; the said sum of $20,000 being paid as a bonus for granting this sub-lease and being in addition to the rental.
The respondent determined that the amount of $20,000 received by petitioner during the taxable year 1923 should be included in its gross income for that year.
OPINION.
LOVE: Petitioner's counsel contended at the hearing that the amount of $20,000 should be prorated over the term of the lease, and an aliquot part returned each year thereof, instead of including the entire amount as income in the year in which it was received. We have held in similar cases that this could not be done. See , and cases cited therein, and . The respondent's determination on this issue is approved.
Petitioner offered no evidence in connection with the second assignment of error, and, in the absence of such evidence, we must affirm the respondent's determination relative thereto.
Judgment will be entered for the respondent.