*3533 Value of sheep in inventory at December 31, 1918, determined upon the evidence.
*455 This proceeding results from the determination of a deficiency for 1918 of $5,673.22. The alleged errors are substantially as follows: (1) the Commissioner added to 1918 income an amount of $9,792.74 which was a duplication of a like amount already reported in income; (2) the Commissioner erred in increasing the value of sheep in inventory at close of the year $1 per head over the opening inventory, whereas there was a decline in value of $1 per head under the value at the beginning of 1918.
FINDINGS OF FACT.
The petitioner is a ranchman residing at Augusta, Mont., engaged principally in raising sheep and wool. This has been his occupation for over 40 years.
On January 3, 1919, he received the sum of $9,792.74, being the proceeds of wool clipped in 1918. This amount was included in gross income returned for 1918 and also reported in income for 1919. The Commissioner took the amount out of 1919 income, but added it to the 1918 income. *3534 Since it had already been included in the 1918 income, the latter is overstated by $9,792.74.
It was stipulated by counsel that the total value of the opening inventory of 1918 was $99,962.50.
At December 31, 1918, the petitioner had the following sheep:
| Ewes | 6,164 |
| Ewe lambs | 2,048 |
| Weather lambs | 573 |
| Bucks | 117 |
The ewes ranged in age from 1 to 8 years. They were average range sheep of Montana. We find that the values per head at December 31, 1918, were as follows: ewes, $10; ewe lambs, $8; wethers, $7.
OPINION.
LOVE: The first issue arose from the duplication of an item in the 1918 income, which respondent's counsel admitted was in error. A correction should be made accordingly. The other issue is the value of sheep in inventory at the close of the year. There were two *456 expert witnesses on values - the petitioner, in his own behalf, and another expert sheepman on behalf of the respondent. The latter was of the opinion that ewes from 1 to 4 years old were worth $15 per head. This opinion was based partly on sales of yearlings made by him in August to October, 1918, at $15.50. He did not give, and was not asked his opinion of the*3535 value per head of a band of sheep of this size, grade and quality, of ages ranging from 1 to 8 years. It was not disputed that a ewe was of highest value in the second year. The evidence indicates that value varies with the age, and there is a gradual decline after the second year. This witness had bought 8-year olds in the fall of 1918 at 5 cents a pound, or about $5.50 per head. The petitioner's opinion was that the average value was $10. Upon all of the testimony before us, we think that the latter figure is correct for this band of ewes.
Petitioner valued the ewe lambs at $7, and the wethers at $6. Upon a consideration of the evidence, we believe they were worth $8 and $7 per head, respectively, and have found accordingly. No testimony was offered as to the value of bucks.
The statement annexed to the deficiency letter shows that there was a net loss in 1919 which was deducted in arriving at the net income for 1918. Appropriate adjustment of the amount of the 1919 income, resulting from the revision of the inventory at the close of 1918, will be made in redetermining the amount of the deficiency for 1918.
Judgment will be entered under Rule 50.