*3700 1. A commercially operated lemon grove is a depreciable asset.
2. Rates of depreciation on lemon trees, orchard equipment, trucks, and tractors, determined.
*992 This is a proceeding for the redetermination of a deficiency in income and profits tax for the fiscal year ended July 31, 1920, in the amount of $639.97. The controversy arises from the disallowance by the Commissioner of any depreciation on lemon trees owned by the petitioner at March 1, 1913, and on certain tractors and trucks acquired during the taxable year.
FINDINGS OF FACT.
The petitioner is a California corporation, with its principal office at Lemon Grove, where it is engaged in the production and sale of lemons. At March 1, 1913, it owned a producing grove of 15,000 lemon trees, which had a fair market value of $12 each at that date. The normal, productive, useful life of a lemon tree is 30 years.
During the taxable year the petitioner acquired trucks, automobiles, tractors, and spray outfits as listed below with dates of purchase, cost, *3701 and rates of depreciation stipulated by the parties and which the Board finds are reasonable:
| Date of purchase. | Article. | Cost. | Rate. |
| Per cent. | |||
| October 15, 1919 | Reo truck | $848.75 | 20 |
| October 27, 1919 | Spray rig | 155.00 | 20 |
| October 31, 1919 | Wallis tractor | 3,564.00 | 25 |
| January 15, 1920 | Triplex spray outfit | 594.13 | 20 |
| February 9, 1920 | Wallis tractor | 700.00 | 25 |
| February 26, 1920 | 2 Fordsons | 1,790.00 | 25 |
| April 5, 1920 | Chevrolet tractor | 944.65 | 20 |
| April 30, 1920 | Automobile | 1,050.00 | 20 |
*993 OPINION.
LANSDON: The evidence convinces us that the petitioner owned a lemon grove of 15,000 trees at March 1, 1913, that such grove had a fair market value of $180,000 at that date, that the grove was producing lemons in commercial quantities at such date, and that the useful life of a lemon tree is 30 years.
During the taxable year the grove was in full bearing as a commercial orchard, and the petitioner is entitled to an annual allowance for its exhaustion under the provisions of section 234(a)(7) of the Revenue Act of 1918. We have found that the normal useful life of a lemon tree is 30 years. It follows, therefore, that the*3702 average composite useful life of all the trees in the grove is 30 years and that the petitioner is entitled to an annual allowance of 3 1/3 per cent as a deduction from gross income, based on value at March 1, 1913, plus subsequent capital additions.
There appears to be some confusion in relation to equipment acquired during the taxable year. The petitioner alleges that the Commissioner refused to allow any deductions on account of depreciation of such equipment, but this is denied. The petitioner is entitled to deduct from its gross income for the taxable year depreciation on implements and equipment acquired during the year at times and costs and stipulated rate of depreciation as set forth in our findings above.
Judgment will be entered after 20 days' notice, under Rule 50.