These appeals involve deficiencies in income taxes for the year 1920 in the following respective amounts: Elsie S. Eckstein, $265.59; Lois M. Stumer, $33.11; Louis M. Stumer II, $33.77; Gladys R. Byfield, $11.28; Benjamin J. Rosenthal, $886.36; Hannah S. Rosen-thal, $167.82; Aline Blanche Stumer, $33.77; Blanche G. Stumer, .$554.46; Elaine R. Reinhardt, $187; Louis Eckstein, $1,584.56.
The issue raised by the appeals relates to the proper deduction •for exhaustion, wear and tear, and obsolescence of two buildings located in the business district of Chicago.
All of the appeals were submitted upon the same evidence. From the oral testimony, depositions, and exhibits introduced at the hearing the Board makes the following
FINDINGS OE FACÍ.
The North American Building and the Mercantile Building are located in the Loop or down-town business district of Chicago, the North American Building being on the northwest corner of State *20and Monroe Streets and the Mercantile Building being on the west side of State Street between Madison and Monroe Streets.
During the year 1920 the taxpayers had the following respective interests in the two buildings:
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The North American Building was completed in 1912 at a cost of $1,680,257. It was built of steel and concrete, with terra cotta facings and on caisson foundation to rock. It is 19 stories high. The first 12 floors were especially constructed for small shops and retail stores and the remaining seven floors were designed for offices. The ceilings were high and the distance from the inside corridors to the outside walls was quite deep in order to provide as much space as possible for shops. That construction would not permit the required adaptation of those floors for offices been use of the difficulty of obtaining adequate lighting.
The Mercantile Building was completed in 1905 at a cost of $326,-730, and was constructed of steel and concrete, with terra cotta facings and on caisson foundation to rock. It is six stories in height and was especially designed for occupancy by retail stores. The ceilings were high and the distance between the inside corridors and outside walls was quite deep in order to provide as much space as possible for shops. Owing to the method of construction, the building was not reasonably adaptable for offices.
At the time the buildings were erected, State Street was the principal retail department store and high-grade shop district of Chicago. Commercial and automobile traffic on State Street has so increased as to cause shoppers to find stores in less congested, localities. As a result, the high-grade shops formerly located on State Street have gradually removed to Michigan Avenue and adjacent territory.
The North American Building has felt the change inasmuch as space which formerly was rented to tenants for retail stores for which it was constructed has been changed over for occupancy by loft tenants, from whom rental is received at only 50 to 75 per cent of that paid by retail shop tenants.
*21From the testimony of 11 expert witnesses familiar with the locality and conditions and the various exhibits introduced in evidence, we find the probable useful economic life of both buildings from the respective dates of their construction to be 33y3 years, and a reasonable allowance for the exhaustion, wear and tear of the buildings, including a reasonable allowance for obsolescence, to be at the rate of 3 per cent upon the respective costs of the buildings from the dates of their construction.
By reason of a stipulation of the parties, the determination of the proper deductions based upon March 1, 1913, values becomes un•necessary. *•
All other questions in issue by the pleadings were waived at the hearing by the nonproduction of evidene.
DECISION.
The deficiencies determined by the Commissioner are disallowed and the taxes, if any, should be computed pursuant to the foregoing findings of fact. The amount of any deficiency to be assessed with reference to each taxpayer, respectively, will be settled on consent or on 10 days’ notice, under Bule 50.