*716 Before GRAUPNER, TRAMMELL, and PHILLIPS.
This appeal is from the determination of a deficiency in income and profits taxes for the calendar year 1918 in the amount of $3,034.11. The principal issue is whether a certain business was conducted by the taxpayer, a corporation, as determined by the Commissioner, or by an individual.
FINDINGS OF FACT.
1. In January, 1914, C. W. Waldron instituted a rug and furniture business at Seattle, Wash. This business was conducted under the trade name of Waldron Co. and, to comply with the statutory requirements of the State of Washington, Waldron filed in the office of the clerk of King County at Seattle, Wash., a certificate as follows:
To Whom It May Concern
I hereby certify that the firm name of the Waldron Company, transacting a general merchandise business at 1322 and 1324 Fourth Avenue in the City of Seattle, Washington, is the trading name of the undersigned, who alone is the sole owner and only person interested in the same.
April 10, 1914.
C. W. WALDRON.Subscribed and sworn to April 10, 1914, before*2290 L. B. Loren, Notary Public.
2. In March, 1915, Waldron, being then 62 years of age and desiring to provide for the convenient transfer of his business to his daughter in the event of his death, took steps to incorporate under the laws of the State of Washington. Articles of incorporation were prepared and filed in accordance with the laws of the State of Washington by which a corporation under the name of "Waldron Co." was created. The trustees named in the articles of incorporation were Waldron and R. N. Fulton, an employee of Waldron. Waldron was named as president and Fulton as secretary of the corporation. The capital stock authorized by the articles was $25,000, divided into 500 shares of a par value of $50 each. Certificates for 450 shares of stock were made out in the name of Waldron, 49 shares in the name of Grace V. Bradley, Waldron's daughter, and one share in the name of Fulton. These certificates were taken into possession by Waldron and placed in an envelope in his safe. The certificate which was made out in Waldron's name was endorsed by him in blank before being placed in the safe. At about the same time the certificates of stock were made out Waldron executed*2291 a bill of sale of all the assets of the business from himself to the corporation which was also placed in his safe.
3. After the incorporation no new books of account were opened, Waldron continuing to use the simple form of accounting which he adopted at the time he commenced business in 1914. The business *717 was carried on without the formality of corporate meetings, Waldron dictating and directing the conduct of the business at all times. Merchandise was sometimes purchased in the corporate name and sometimes in Waldron's name. Several replevin suits were brought in the name of the corporation.
Waldron signed his name as president after the signature "Waldron Co." to quite an extent, while Fulton signed "Waldron Co." by himself as secretary when drawing checks on the bank during Waldron's absence.
4. Each year after 1914 Waldron listed the property constituting the business conducted under the name of Waldron Co. with the assessor of King County, Wash., as his individual property, and paid the taxes thereon. However, the taxpayer filed corporation income-tax returns for the years 1915, 1916, 1917, and 1918 with the collector of internal revenue at Seattle, *2292 executed by Waldron as president. The corporation license tax required by the laws of the State of Washington was paid each year by Waldron Co.
5. Waldron's object in forming a corporation was to provide an easy and simple method of transferring the business to his daughter in event of his death.
DECISION.
The determination of the Commissioner is approved.
ARUNDELL not participating.