*610OPINION.
Littleton:The Board heretofore decided, in the Appeal of Parish-Watson & Co., 2 B. T. A. 851, that, under the terms of the agreement of October 17, 1917, the profit on the sale of the art objects belonging to the four joint venturers — W. D. N. Perine, M. Parish-Watson, Michael Dreicer and Jacob Dreicer — constituted income to them and not to the petitioner. That agreement was in force during the years 1920 and 1921, and the profit upon the sale of the art objects belonging to the joint venturers under the terms of this contract and sold to Willys, and others, by the petitioner was erroneously included by the Commissioner in its income. As to certain of the objects sold, persons other than the petitioner had a joint interest therein and were entitled to share in the profits of the sale. Without discussing the evidence in detail, the Board has set forth in the findings of fact the profit which each joint venturer, each joint owner, and the petitioner received upon the sale of the 16 articles, and, in determining the tax of this petitioner in accordance with this opinion, only $71,585.71 should be included as income to it from that source. The amount of $5,468.70, representing profit upon the sale during 1920 of certain art objects belonging to the joint venturers, constituted income to them and should not be included as income to the petitioner in that year.
In making its returns for 1920 and 1921, the petitioner did not include as income any amount on account of payments made by Willys, upon the ground that the transaction was not a completed sale until final payment was made and whatever profit accrued to it constituted income at that time.
*611The Commissioner contends that the parties intended that there should be and that there was, in fact, a sale in July, 1920, and that the profit thereon accrued at that time.
We can not agree with the Commissioner’s contention that there was a completed sale in 1920 on which the petitioner realized a profit or sustained a loss. The contract provided (1) that the purchase price to be paid should be $299,800, subject to certain conditions hereinafter mentioned, (2) that the articles sold remained in Willys’ hands, (3) that title should remain in the petitioner until paid for as provided in the contract and that petitioner should carry the insurance thereon, (4) that Willys should pay $100,000 in cash and $199,800 in installments, namely, $50,000 on November 10, 1920, $114,000 on January 10, 1921, and $35,800 on January 10, 1922, (5) that he might anticipate any or all of the deferred payments and thereby claim title to the article or articles, (6) that he might exchange before the time fixed for the final payment any of the listed articles for another or a group of similar articles in petitioner’s collection, and (7) that he might return any or all of the articles before the date fixed for the final payment and' receive back all payments made and cancel any remaining payments, less 10 per cent of the amount originally agreed upon as the price to be paid.
We are not here dealing with the ordinary case of a sale with an extension of time for making the payment and retention by the seller during that time of legal title as security for the unpaid purchase price. This contract was nothing more than a continuing offer of Parish-Watson & Co., Inc., to sell the 16 art objects for the price set forth in the list furnished, totaling $299,800. By it Willys had the option or privilege of accepting the offer and purchasing the articles or of refusing to purchase the same through the exercise of the option given him by the contract by forfeiting 10 per cent of the price agreed upon. Under these circumstances, it was not definitely known, during either of the years 1920 or 1921, by either party that Willys would purchase the articles. ' He had not exercised the option to cancel the contract, nor had he indicated that he would elect to purchase. He exercised one of the privileges given him by the contract and returned an article on which the profit would have been $25,000 for one on which a profit of only $16,000 inured to the petitioner.
An offer to buy or sell becomes completed and binding when the person to whom it is made accepts it and communicates his acceptance or performs some act in compliance with the terms of the offer upon which his acceptance, so as to bind him, may be implied. An offer, unless withdrawn, may be accepted within a time expressly limited, and where such time is given it is not a completed contract *612or a sale of property -until formal -acceptance or until the time expressly fixed at or after which the purchaser may, by word or action, indicate his acceptance. The parties stipulated that the purchaser should have the right to purchase the property or not, as he saw fit, within the time specified, namely, January 10, 1922. There was a valuable consideration for this option, since Willys agreed to pay 10 per .cent of the stipulated price if he should not purchase, without which the contract between the parties would have been void for lack of mutuality of engagement. Where- there is an option in a contract to rescind, if the time within which the option can be exercised is prescribed, such condition must be complied with and a failure to comply with it terminates the option and the sale becomes absolute and completed.
The Board is of the opinion that, under the terms of this contract and the evidence before it, this was not a completed sale in either of the years 1920 or 1921, resulting in the realization of a gain or the sustaining of a loss by the petitioner. And since the question of tax liability for j'-ears subsequent to 1921 is not before the Board it is not necessary to consider it, or to decide at what time subsequent to 1921 the transaction was completed for the purpose of computing the gain or loss.
Order of redetermination will he entered on 15 days’ notice, wider Rule 50.