*1266 OPINION.
PHILLIPS: The Commissioner determined a deficiency of $488.45 in income tax for 1924, whereupon the petitioner instituted this proceeding to redetermine its liability. The proceeding was submitted upon the pleadings and a stipulation of facts. The petition sets out two allegations of error, but the briefs of both parties concede that the only question involved is the March 1, 1913, value of 350 shares of the capital stock of the Light Publishing Co.
FINDINGS OF FACT.
The petitioner is a national banking association organized under the National Banking Laws of the United States, with its principal office at 31 Nassau Street, in the Borough of Manhattan, City, County and State of New York, and is the trustee under a declaration of trust made and executed by Anna Sinton Taft on March 13, 1924.
On March 13, 1924, Anna Sinton Taft executed and delivered to the petitioner certain property consisting of shares of stock and notes, to be held by the petitioner under the terms of the said trust. Among the securities so delivered to the petitioner*2161 were 350 shares of the capital stock of the Light Publishing Co., of San Antonio, Tex.
On May 7, 1924, the petitioner, acting under the powers given to it by said declaration of trust, sold the said 350 shares of stock of the Light Publishing Co. for the sum of $50,321.44, which consideration was paid by two notes in the sum of $25,000 each and the sum of $321.44 in cash.
The Commissioner determined that said stock was acquired by Anna Sinton Taft prior to March 1, 1913, and that said 350 shares of stock had a fair market value of $39,952.50 on that date.
The Light Publishing Co. is a corporation organized April 1, 1911, under the laws of the State of Texas, for the purpose of operating a daily newspaper. On April 1, 1911, it purchased a newspaper property in San Antonio which was known as the "Light and Gazette." The purchase price of said property was $200,000.
*1267 The cash value of the good will of the Light Publishing Co. was on April 1, 1911, and May 1, 1924, $150,038.74 and $409,169.64, respectively.
The circulation of the daily newspaper printed by the Light Publishing Co. on April 1, 1911, March 1, 1913, and May 1, 1924, was 11,500, 19,930 and 30,007*2162 copies, respectively.
During the period October, 1911, to December, 1911, the Light Publishing Co. expended $18,104.30, of which $11,829 consisted of premiums and $6,275.30 other expenses toward increasing the circulation of the paper, and during November and December, 1912, expended $1,803.67, of which $827.84 was for premiums and $975.83 other expenses, these also being made for the purpose of increasing the circulation.
The net income of the Light Publishing Co. as reported on its income-tax returns, was as follows:
| 1912 | $1,234.83 |
| 1913 | 3,139.97 |
| 1914 | 2,908.45 |
| 1915 (loss) | 2,257.57 |
| 1916 | 27,408.47 |
| 1917 | 13,444.26 |
In valuing the stock as of March 1, 1913, the Commissioner determined that the value of the good will of the corporation on March 1, 1913, did not exceed the price paid for such good will on April 1, 1911.
The fair market value of 350 shares of the capital stock of the Light Publishing Co. on March 1, 1913, was $39,952.50.
Decision will be entered for the respondent.