*1191 LOVE: This is an appeal from the determination of deficiencies for the years 1919 to 1921, inclusive, in the sum of $1,381.41. The deficiencies arose from the refusal of the Commissioner to allow deductions for exhaustion of certain leaseholds.
FINDINGS OF FACT.
The petitioner is an individual and was engaged in the business of buying and selling leaseholds at Providence, R.I. Prior to March 1, 1913, he acquired three leaseholds, one of which was known as "Butts Estate," terminating January 1, 1920; one of which was known as "Crowell Building," terminating May 1, 1929; and one of which was known as "Wood Estate," terminating September 1, 1949.
The leaseholds in question were appraised as of March 1, 1913, by William H. Draper and James H. Hurley, expert real estate appraisers, as follows:
| Leasehold. | Draper. | Hurley. |
| Butts estate, 1/2 interest, 6 years 10 months | $8,111.25 | $8,198.75 |
| Crowell Building, 36 years, 6 months to run | 58,465.25 | 58,888.75 |
| Wood estate, 16 years, 2 months to run | 26,026.75 | 25,551.00 |
*1192 *2050 On March 1, 1913, the value of the several leaseholds was as follows:
| Butts estate | $8,111.25 |
| Crowell Building | 58,465.25 |
| Wood estate | 26,026.75 |
The petitioner in his income-tax returns for 1919, 1920, and 1921, deducted as exhaustion on the leaseholds, as follows:
| 1919. | 1920. | 1921. | |
| Butts estate | $1,000 | Expired. | Expired. |
| Crowell Building | 1,000 | $1,000 | $1,000 |
| Wood estate | 1,000 | 1,000 | 1,000 |
The Commissioner refused to allow any exhaustion on the leaseholds on the theory that leaseholds are not subject to deductible exhaustion. The proper exhaustion on the several leaseholds is as follows:
| Butts estate | $1,187.00 |
| Crowell Building | 1,601.78 |
| Wood estate | 1,609.90 |
Order of redetermination will be entered on 15 days' notice, under Rule 50.