*2408 The term "capital assets" as defined in section 206(a)(6) of the Revenue Act of 1921 means property actually acquired and held by the taxpayer for profit or investment for more than two years. Magdaline McKinney,16 B.T.A. 804">16 B.T.A. 804; William Kempton Johnson,17 B.T.A. 611">17 B.T.A. 611.
*399 These are proceedings for the redetermination of deficiencies in income taxes for the year 1923, in amounts as follows:
| Dollie B. Shoenberg | $4,612.29 |
| Sydney M. Shoenberg | 35,361.20 |
Each petition alleges that the respondent committed errors described as follows:
1. That the respondent has erroneously, and in violation of the Constitution, taxed as income alleged profits received by the petitioners through the sale of certain stocks acquired by gift and sold upon the day such gifts were received. The respondent's action is based upon section 202(a)(2) of the Revenue Act of 1921.
2. In the event that the first contention is determined adversely to them the petitioners contend that any tax upon the profit*2409 derived upon sale of the stock above described should be computed under the "capital net gain" provision of section 206(a)(6) of the Revenue Act of 1921.
*400 Upon brief the petitioners abandon their first allegation of error, the issue having been decided adversely to them in .
The facts were presented by the pleadings and a stipulation.
FINDING OF FACT.
The petitioners are residents of St. Louis, Mo.
On January 23, 1923, the petitioner, Mrs. Dollie B. Shoenberg, received as a gift from her husband, Moses Shoenberg, 520 shares of the common stock of the May Department Stores Co. and on that day she sold the said stock at its then market value, receiving therefor $37,960. The cost of the said stock to the donor, Moses Shoenberg, was $8,701.16.
On January 23, 1923, the petitioner, Sydney M. Shoenberg, received as a gift from his father, Moses Shoenberg, 1,820 shares of the common stock of the May Department Stores Co., and on that day he sold the said stock at its then market value, receiving therefor $132,860. The cost of the said stock to the donor, Moses Shoenberg, was $30,454.06.
The stock given the petitioners*2410 by Moses Shoenberg on January 23, 1923, was purchased by the said donor prior to March 4, 1918, and was held by him until given to the petitioners.
OPINION.
LOVE: In light of , the petitioners have abandoned their contention relative to the constitutionality of section 202(a)(2) of the Revenue Act of 1921.
The alternative contention of the petitioners is that the profit derived upon sale of the stock should be taxed at the 12 1/2 per cent rate prescribed by section 206(a)(6) of the Revenue Act of 1921. In effect the petitioners contend that if the basis for determining their gain or loss is the cost of the stock to the donor they should be permitted to add the time that the stock was held by donor to the time it was held by them in computing the two-year period required by section 206(a)(6).
In , we considered the same question under the same provision of statute. We there said:
* * * In denying this contention it need only be stated that the petition and the stipulation of facts show that the property was acquired and sold within the year 1922, and, therefore, *2411 was not "held by the taxpayer * * * for more than two years" as is required for the computation of the tax under section 206.
And in discussing the petitioners' contention that the time the property was held by the donor should be added to the time that *401 the donee held it before sale, in computation of the two-year period mentioned in section 206(a)(6), we said in :
* * * We are not insensible to the expediency of the theory underlying the argument advanced on behalf of the petitioner, but we are of the opinion that property in order to constitute a capital asset within the meaning of section 206(a)(6) of the Revenue Act of 1921 must have been actually acquired and held by the taxpayer himself for profit or investment for more than two years.
Reviewed by the Board.
Judgment will be entered for the respondent.
TRUSSELL and SEAWELL dissent.