Wise Realty Corp. v. Commissioner ( 1926 )

.OPINION.

Murdock:

Salaries for Guntner and McCue for the year 1919, totaling $1,500, were reasonable allowances for personal services actually rendered, but were not paid in the taxable year and are not proper deductions from gross income in that year in the absence of satisfactory proof that the books were kept on the accrual basis and that the amount of the salaries was entered thereon in 1919, from which we could conclude that the amount was accrued in that year. The remaining $8,900 was specifically for salaries for prior years, was unrelated to compensation for services rendered during the year 1919, and is disallowed as a deduction in that year. Appeal of H. T. Cushman Mfg. Co., 2 B.T.A. 39; Appeal of Columbia Textile Co., 2 B.T.A. 472; Appeal of Green Oil Soap Co., 3 B.T.A. 467.

The Commissioner admitted that in his calculation of the deficiency “ the cost of lots ” for the year 1919 should be $17,646.72, and that for the year 1921 it should be $8,199.49, instead of the figures used. These errors should be corrected in the redetermination of the deficiency in accordance with this opinion.

We are unable to find any satisfactory evidence to convince us that the determination of the Commissioner was otherwise in error. There is not sufficient data in evidence from which we can compute a cost of the lots in excess of that computed by the Commissioner, nor from which the Commissioner’s computation can be tested. So far as the record discloses, the unsold land consists of about 200 acres, worth not more than $1 an acre, and an unknown number of lots, worth an unknown amount. We are in ignorance of the value which the Commissioner placed upon the unsold land. How, then, can we say that it was excessive, or how can we say what the correct amount should be? There was no evidence offered in regard to the item of $634.44, and that offered to prove that the Commissioner neglected to consider land used for streets and alleys was not convincing.

Judgment will be entered after 15 days’ notice, under Rule 60.