*528 Before SMITH, LITTLETON, JAMES, and TRUSSELL.
This appeal is from a determination of a deficiency in income tax for the year 1920 in the amount of $407.96. The taxpayer alleges error on the part of the Commissioner in disallowing as a deduction from gross income $45,976.52 alleged loss on the sale of good will of a business.
*529 FINDINGS OF FACT.
The taxpayer was a California corporation with principal office in Los Angeles. It was voluntarily dissolved in 1920. Prior to its voluntary dissolution it was engaged in the merchant tailoring business and at the date of its incorporation in 1911 acquired the assets and good will of a predecessor business by the specific issue of its capital stock therefor of a par value of $100,000, including $45,976.52 for the good will. The business with the good will appurtenant thereto was sold during 1920 at a price equal to the book value of the tangible assets only, nothing being realized for the good will. the latter asset, however, was specifically included in the bill of sale.
In its income-tax return*2378 for 1920, the taxpayer reported a net loss of $39,896.92. The Commissioner disallowed the deduction from gross income of $45,976.52, alleged loss on the sale of good will. The net income as corrected was $6,079.60. After the deduction of the exemption of $2,000 the Commissioner has proposed the assessment of the normal corporation tax at 10 per cent upon the balance of $4,079.62, the amount of the tax being $407.96.
DECISION.
The determination of the Commissioner is approved.
ARUNDELL not participating.