Cuba Grapefruit Co. v. Commissioner , 6 B.T.A. 260 ( 1927 )

OPINION.

Littleton:

In the opinion of the Board, the evidence submitted fully justifies a cash value of $708,375 claimed by petitioner for the properties paid in to it for stock in November, 1914. The evidence consists of testimony of three witnesses who were thoroughly familiar with these properties and were experienced in the operation of orange and grapefruit orchards in Cuba. They were fully qualified to express their opinion of the cash value of the properties. One of the witnesses has been engaged in managing and caring for the properties involved since' 1908. Another witness is and has been for a number of years the owner of an orchard near that of petitioner and is familiar with the values of such properties. The third witness is the vice president and a director of the petitioner and has been engaged in buying and selling citrous fruit produced in Cuba for twenty-six years. During this time he has spent a great deal of his time in Cuba, and is thoroughly familiar with this industry and with the value of citrous fruit properties in that Eepublic. He has been especially familiar with petitioner’s properties for several years. These witnesses explained in detail the facts and circumstances upon which they based their opinions.

In addition to the facts stated, it is shown that the orange and grapefruit orchards on this property were capable of producing at the date of purchase, and in fact subsequently did produce, net earnings of at least $90 per acre per year.

These witnesses placed a conservative cash value in November, 1914, upon the properties acquired by petitioner, as follows:

613 acres first-class grove, $1,200 an acre-$616,600

287 acres slightly deficient grove, $250 an acre- 96, 750

100 acres Of bare land, and 30 acres of lemon trees, $100 an acre-!- 13,000

58 mules, $250 eacli_ 14, 500

Packing house- 10,000

Machinery and equipment- 3,000

Manager's house_ 6, 000

24 laborers' houses- 5,000

Field equipment, tools, £te_ 7,000

Railroad- 3,000

Total_ 773, 850

Petitioner claims a cash value of only $108,375, and we are of opinion from consideration of all the evidence that the facts fully sustain the cash value claimed by the petitioner for the properties on November 16, 1914.

The amount of $708,375 should therefore be used as the basis for computing the petitioner’s invested capital for the taxable years.

Judgment will be entered on 15 days’ notice, under Rule 50.