*507 Before GRAUPNER, LITTLETON, and SMITH.
This is an appeal by the executor of the estate of Ernst Wenzel from a deficiency in income tax asserted by the Commissioner for the calendar year 1920 in the amount of $587.77.
The appeal is based upon -
First - An overstatement of income by an understatement in the revenue agent's report of purchases within the year, in the amount of $2,000, due to an error in addition, which report was followed by the Commissioner in determining the deficiency.
Second - An overstatement in the deficiency letter of $1,000 in the profit received by taxpayer from a sale in 1920 of real estate located at 1011-13 Garfield Avenue, Detroit, Mich.
From the oral testimony and the exhibits, the Board makes the following
FINDINGS OF FACT.
The revenue agent's report of investigation of the records of Ernst Wenzel for the calendar year 1920 filed as an exhibit, shows in Exhibit "A" - Profit and loss statement as of December 31, 1920, the following:
| Purchases: | |
| Plumbing | $24,740.49 |
| Electrical | 15,947.24 |
*2899 The total purchases of plumbing and electrical stock during the year as shown by the revenue agent's report, and as used by the Commissioner in his determination, were the figures appearing in taxpayer's ledger as of December 31, 1920, under "plumbing stock" and "electrical stock," respectively. The original ledger sheet of purchases of plumbing stock shows an error in addition on August 31, 1920, of $1,000.00, as follows:
| Date. | Folio. | Debits. | Balance. |
| 1920 | |||
| $15,459.21 | |||
| Aug. 31 | P-49 | $1,463.90 | 15,923.11 |
The total purchases, including the item of $1,463.90, were $16,923.11 instead of $15,923.11.
*508 The original ledger sheet of total purchases of electrical stock shows an error in addition on December 10, 1920, of $1,000.00, as follows:
| Date. | Folio. | Debits. | Balance. |
| 1920 | |||
| $13,890.42 | |||
| Dec. 10 | P-53 | 562.76 | 13,469.08 |
The total purchases, including the item of $562.76, were $14,469.08 instead of $13,469.08. These errors in addition resulted in the total purchases of electrical stock and plumbing stock being understated on December 31, 1920, in the amount of $1,000 each.
With regard to the taxable profit*2900 received by this taxpayer upon the sale by him in 1920 of the land and building at 1011-13 Garfield Avenue, Detroit, Mich., the deficiency letter shows that the Commissioner determined the March 1, 1913, value of the land and building to be $5,710, and depreciation on the building to date of sale in the amount of $956.67, and a sales price in 1920 of $7,200. The profit on the sale is shown to be $3,446.67. The correct taxable profit on this sale based upon the figures shown in the deficiency letter as to the March 1 value, depreciation and sale price which are not in dispute, is $2,446.67 instead of $3,446.67 as shown by the deficiency letter.
DECISION.
The dificiency should be recomputed by reducing plumbing and electrical purchases within the year by the amount of $2,000, and by reducing the profit of $3,466.67 on the sale of property at 1011-13 Garfield Avenue, Detroit, Mich., to $2,446.67.
Final determination will be settled on consent or on seven days' notice in accordance with Rule 50.