*236OPINION.
Lansdon:Section 200 of the Eevenue Act of 1918, applicable to tbis appeal through the retroactive provisions of the law, defines the term “personal service corporation” as follows:
The term “ personal service corporation ” means a corporation whose income is to be ascribed primarily to the activities of the principal owners or stockholders who are themselves regularly engaged in the active conduct of the affairs of the corporation and in which capital (whether invested or borrowed) is not a material income-producing factor. * * *
It is necessary to consider, so far as the year 1918 is concerned, only—
1. Whether the income of the taxpayer is to be ascribed primarily to the activities of its principal owners or stockholders.
2. Whether such owners or stockholders were regularly engaged in the active conduct of the affairs of the corporation; and
3. Whether the taxpayer was one in which capital, whether invested or borrowed, was a material income-producing factor.
From the findings of fact it appears the total gross income of the corporation resulted from fees and commissions charged for the direct personal service of stockholders of the corporation or for clerical services rendered by employees directly under the supervision of such stockholders; that two of the stockholders devoted practically their entire time to the affairs of the taxpayer; and that the remaining three stockholders were regularly active in the business to which they devoted a substantial part of their time. It also appears that the taxpayer’s total paid-in capital was only $1,000, which was invested in office equipment, and that the paid-in capital was never at any time supplemented by borrowed- funds.
It is the opinion of the Board that this taxpayer meets all the requirements of the definition of a personal service corporation. Its income is primarily due to the activities of its principal owners and stockholders; all the stockholders were regularly engaged in the active conduct of the affairs of the corporation; and invested capital was not a material income-producing factor.