Koepfli v. Commissioner

*785OPINION.

Makqubtte :

The best evidence of market value is the selling price of property, between one willing but not compelled to sell, and one willing but not compelled to buy. Measured by that standard, the petitioners paid, in 1905, the then fair market value of the land. This was $94,610.74. There is no evidence before us as to sales of similar property on or about March 1,1913. But, as of that date, the Los Angeles Beal Estate Board in 1925 appraised the land as having a value of $382,797.80. This valuation is substantiated by other evidence.

The buildings upon the land in 1913 cost $94,134.19 and $5,543.73', respectively. The first was erected during the year 1907 and the second during 1908. Presumably, these buildings were subject to depreciation. It is quite evident that, in fixing a valuation as of March 1, 1913, the respondent did compute some depreciation on these buildings; but how much, we are not advised. There is no evidence to indicate what rate of depreciation was used by the respondent, nor whether that was the correct rate. We only know that the respondent determined the land and buildings had a market value March 1, 1913, of $345,463.54. This was $37,334.26 less than the value of the land alone, as disclosed by the evidence.

While it is probable that the buildings had some value on March 1, 1913, the evidence produced fails to touch upon this matter. The *786petition does contain an allegation as to the March 1, 1913, value of the buildings; but this is flatly denied in the answer. The burden of proof was upon the taxpayer and he has failed to sustain it. In recomputing the taxes, therefore, the rate of depreciation of the buildings, already used by the respondent, will stand as correct.

The amount of taxable gain resulting from the sale of this property should be recomputed, based upon a value of $382,797.80 for the land, plus the depreciated value of the buildings, all as of March 1, 1913.

Judgment will be entered wider Rule 50.