*3409 The March 1, 1913, value of certain lands sold by the petitioner in 1920 determined.
*1050 This proceeding is for the redetermination of a deficiency in income and profits taxes asserted by the respondent for the year 1920 in the amount of $7,732.65. The petition herein sets forth six assignments of error, all of which were abandoned by the petitioner at the hearing except one which challenges the correctness of the respondent's determination that certain land sold by the petitioner had a fair market value of $12.50 per acre on March 1, 1913. The respondent filed an amended answer to the petitioner, wherein it is alleged that the March 1, 1913, value of the land in question was in fact only $2.50 per acre.
FINDINGS OF FACT.
The petitioner is an Illinois corporation with its principal office at 33 Rector Street, New York City.
Prior to March 1, 1913, the petitioner purchased for $300,000 a tract of land containing 28,305 acres, hereinafter referred to as the Russell Fork property, situated in Virginia on the*3410 Russell Fork River. In the year 1920 the petitioner sold 1,160 acres of this land for $18,140.
The 1,160 acres of the Russell Fork property which the petitioner sold in 1920 included one tract of 1,003 acres and another tract of 157 acres. Prior to March 1, 1913, the timber of all kinds more than 16 inches in diameter had been cut from the 1,003-acre tract, but only the poplar timber had been cut from the 157-acre tract. The timber standing on the 1,003-acre tract on March 1, 1913, consisted of white oak, red oak, chestnut oak and black oak, of approximately 16 inches or less in diameter. Part of the town of Hayside, Va., was situated on the 1,003-acre tract and there was a vein of coal underlying the 157-acre tract, but the coal was not being mined commercially at that time. The Carolina, Clinchfield & Ohio Railroad was under construction on March 1, 1913, and the right of way thereof traversed the 1,160 acres of land mentioned for approximately one and one-half miles. The railroad was completed late in 1914. The petitioner did not cut from the 1,160 acres the timber of 16 inches or less because it was not profitable to transport logs of that size by floating them down the*3411 river to the petitioner's mill, which was 150 miles away. *1051 The timber was, however, susceptible of being profitably sawed into lumber and transported over the Carolina, Clinchfield & Ohio Railroad, which, as above stated, was under construction on March 1, 1913.
On October 31, 1914, at the request of the petitioner's board of directors, Leon Isaacsen, president of the petitioner, and one C. M. Crawford, made an appraisal of the entire Russell Fork properties. They determined that the value of the property was $353,812.50, or $12.50 per acre. This valuation was an average value for the entire property as of October 31, 1914, and did not purport to place any value specifically on the 1,160 acres which the petitioner sold in 1920.
The March 1, 1913, value of the 1,160 acres of land which the petitioner sold in 1920 was $12.50 per acre. The petitioner in its income-tax return for 1920 did not report any profit as having been realized from the sale of 1,160 acres in that year. The respondent, upon audit of the return, determined that the land had a fair market value of $12.50 per acre on March 1, 1913, and that the petitioner realized a profit of $3,679.26 on the*3412 sale thereof.
OPINION.
MARQUETTE: The record in this proceeding presents for consideration only one issue, namely, what was the fair market value on March 1, 1913, of the 1,160 acres of land which the petitioner sold in 1920? In its amended petition the petitioner alleges that the fair market value of the land in question was $18.75 per acre on March 1, 1913, and that it sustained a loss of $3,610 on the sale. At the hearing, however, the petitioner contended that the fair market value of the land on March 1, 1913, was $15 per acre. The respondent has heretofore determined that the fair market value of the land on March 1, 1913, was $12.50 per acre, but in his amended answer he alleges that the land was entirely denuded of timber subsequent to that date and that the fair market value on March 1, 1913, of what was sold in 1920 was in fact only $2.50 per acre.
We have carefully considered the testimony and other evidence presented to us and we are of the opinion that it fails to establish the contentions of either the petitioner or the respondent. We are not satisfied that the land in question had a value on March 1, 1913, of more than $12.50 per acre, as claimed by the*3413 petitioner, or that it had a value of less than $12.50 per acre, as urged by the respondent. On the state of the record we do not feel justified in disturbing the respondent's determination as set forth in the deficiency letter that the fair market value of the land on March 1, 1913, was $12.50 per acre.
Judgment will be entered for the respondent.