*4121 Amounts levied and collected from the petitioner in 1920, 1921, and 1922 for the maintenance of the Depositors Guaranty Fund are ordinary and necessary business expenses and as such are proper deductions for the year in which paid. First State Bank of Brackettville,9 B.T.A. 975">9 B.T.A. 975, followed.
*396 These proceedings were duly consolidated for hearing and disposition. The Commissioner determined deficiencies in income and profits tax for the calendar years 1920, 1921, and 1922, in the amounts of $142.93, $857.12, and $335.35, respectively. The petitioner alleges that the Commissioner erred in disallowing as deductions from gross income for each of the years in question the amounts paid in those years into the Depositors' Guaranty Fund of the State of Texas.
FINDINGS OF FACT.
The petitioner is a texas corporation with its principal*4122 office and place of business at Weimar. It is, and was during the years 1920, 1921, and 1922, a bank of discount and deposit.
The petitioner during the years 1920, 1921, and 1922 operated and conducted its business under the Depositors' Guaranty Fund (hereinafter called the Fund) for the protection of depositors whose deposits were, by law, guaranteed. It kept its books and records and made its returns upon a cash receipts and disbursements basis.
During the year 1920 there was levied and collected from the petitioner for the maintenance of the Fund, the amount of $1,197.50, which amount constituted the regular annual assessment and no part thereof constituted a special or emergency assessment. The petitioner's reversionary interest in the Fund was not known on December 31, 1920, or at the time of making its return for that year.
During the year 1921 there was levied and collected from the petitioner by special assessments the amount of $9,030.69, the collection of which amount was occasioned by numerous failures of banks operating under the Fund. During the year 1921, petitioner did not pay an annual assessment. Petitioner's reversionary interest in the Fund was not*4123 known on December 31, 1921, or at the time of making its return for that year.
*397 During the year 1922, there was levied and collected from the petitioner for the benefit of the Fund the amount of $2,317.25 as an annual assessment and in addition to this amount there was levied and collected by special assessment the amount of $8,747.19. The petitioner's reversionary interest in the Fund was not known on December 31, 1922, or at the time of making its return for that year.
Upon audit of the returns for the years in question, the Commissioner disallowed any deduction on account of the amounts paid into the Fund.
OPINION.
LOVE: The petitioner's contention in respect of the issue presented in these proceedings has been considered and sustained by the Board in . The amounts paid into the Fund during the year in question as a result of either or both annual and/or special assessments are properly deductible from gross income for the year in which paid.
Judgment will be entered on 15 days' notice, under Rule 50.