*2225 Selling costs incident to the sale of real estate by one not a dealer, the profit being reported on the installment method, held to constitute a reduction of selling price and not a reduction from income. Decision in Mrs. E. A. Giffin,19 B.T.A. 1243">19 B.T.A. 1243, followed.
*1250 The respondent determined a deficiency in income tax in the amount of $1,146.54 for the year 1925. In making the determination he held that in reporting profit from the sale of real estate on the installment basis, a commission and expenses paid in connection with the sales are deductible from the sale price in determining the percentage of profit to be reported. Petitioner alleges that this was error and that the commission and expenses should have been deducted in full from income for the year.
FINDINGS OF FACT.
Petitioner in 1925 sold certain real estate for a consideration of $200,000, receiving in the year of the sale an initial payment of $40,000. The cost of the real estate, including improvements which were not subject to depreciation, was*2226 $21,972.66. In connection with the sale petitioner paid in 1925 a broker's commission of $10,000 and other expenses amounting to $870.15.
Petitioner was not regularly engaged in the business of buying and selling real estate. He reported the profit from the sale on the installment basis. The respondent computed the profit on the sale as follows:
| Sale price | $200,000.00 | |
| Cost: | ||
| Piece bought in 1910 | $5,000.00 | |
| Piece bought in 1915 | 8,500.00 | |
| Improvements | 8,472.66 | |
| Commission | 10,000.00 | |
| Stamps, etc | 870.15 | |
| 32,842.81 | ||
| Gross profit | 167,157.19 | |
| Percentage of profit to be | ||
| reported, $167,157.19, divided | ||
| by $200,000.00 = 83.57%. | ||
| Taxable profit for 1925, | ||
| 83.57% of $40,000.00 | 33,428.00 |
*1251 OPINION.
ARUNDELL: The question presented in this case is the same as that in , and in accordance with our decision in that case we affirm the respondent's determination.
Decision will be entered for the respondent.