*210OPINION.
Lansdon:The taxpayer alleges, as errors of the Commissioner upon which he predicates this appeal, four issues as follows: (1) In computing the value of good will as of March 1, 1913; (2) in refusal to allow obsolescence of good will for the period falling in 1917 of the taxpayer’s fiscal year ended June 30, 1918; (3) in the computation of the loss on sale of plant in the year ended June 30, 1918; and (4) in the computation of depreciation on the taxpayer’s plant and equipment.
The first issue involved in this appeal is the valuation of good will of the taxpayer on March 1, 1913. This is a question of fact. The elements of such value and the rules for its ascertainment differ widely. The taxpayer asserts that the fair market value of its good will on March 1, 1913, was $400,000; the Commissioner contends that it was only $188,654.55. The burden of proof is on the taxpayer. The value of good will may sometimes be arrived at by attributing a fair return to tangible assets invested in the business and capitalizing the actual average net earnings from operations, if any, in excess of the fair return on the tangible assets on a reasonable percentage basis. The number of year's to be used over which the earnings should be averaged, the percentage to be attributed to the tangible assets, and the basis of the capitalization of the remaining earnings are questions to be determined from pertinent facts and conditions. Appeal of Dwight & Lloyd Sintering Co., Inc., 1 B. T. A. 179. With this rule in mind it is obvious that the market value of the stock of the taxpayer would not be greater than the average of other' taxpayers similarly situated, and, in the absence of competent proof to the contrary, we are convinced that the value of the good will of the taxpayer on March 1,1913, was not greater than the amount determined by the Commissioner.
The second issue involved is the refusal of the Commissioner to allow obsolescence of good will for the period falling in 1917 of the taxpayer’s fiscal year ended June 30, 1918. The taxpayer, since its organization, has kept its books on the basis of a fiscal year ended June 30. It has, therefore, uniformly filed its income-tax returns, under the several Revenue Acts, for 1916, 1918, and 1921, as permitted by the Acts, on such basis. The Revenue Act of 1916 contained no provisions recognizing losses resulting from obsolescence. The Revenue Act of 1918 provides for the deduction of “ a reasonable allowance for the exhaustion, wear and tear of property used in trade or business, including a reasonable allowance for obsolescence.”' For the fiscal year ended June 30, 1918, the Commissioner allowed loss resulting from obsolescence only for that portion of such year *211falling in the calendar year 1918. The evidence shows that the earnings of the taxpayer for the fiscal year ended June 30, 1918, were about $220,000. The Board is of the opinion that neither the law nor the evidence supports any claim for obsolescence of good will prior to January 1, 1918.
The third issue which is presented in this appeal is whether the loss sustained by the sale of the plant should be based upon the March 1, 1913, value or upon the original cost, which latter is much less than the March 1, 1913, value. The taxpayer owned a plant which was used for the manufacture and sale of whisky, which, in 1906, when the last improvement and addition were made, cost approximately $152,000.
On March 1, 1913, the agreed value of this property was approximately $250,000, and was sold on May 27, 1918, for $17,750, which was $134,250 less than the cost price and $232,250 less than the March 1, 1913, value. The taxpayer, in its income-tax return, deducted the latter sum as the amount of its loss on sale of property. The Commissioner reduced the amount of the deduction to the actual loss of $134,250. The action of the Commissioner in this regard was correct. United States v. Flannery, 268 U. S. 98; and McCaughn v. Ludington, 268 U. S. 106.
The fourth issue involved in this appeal is error alleged in the computation of depreciation on the taxpayer’s plant and equipment. From the evidence submitted it appears that the taxpayer did not use a regular method of writing off depreciation. In some years a large amount was written off; in other years much smaller amounts were written off. The revenue agent testified at the hearing that by spreading the depreciation written off over a period of years the average was 614 per cent, covering buildings and machinery, and that this was about the average used and allowed to other companies similarly situated in that district. The evidence offered indicates that the depreciation allowed by the Commissioner is fair and equitable, and the action of the Commissioner is sustained.