Bismark Realty Co. v. Commissioner

BISMARK REALTY CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Bismark Realty Co. v. Commissioner

Docket No. 9097.

United States Board of Tax Appeals

12 B.T.A. 677; 1928 BTA LEXIS 3480;

June 18, 1928, Promulgated

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Respondent's determination of invested capital sustained.

Nathan D. Shapiro, Esq., for the petitioner.

J. L. Deveney, Esq., for the respondent.

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ARUNDELL

ARUNDELL: The respondent found a deficiency of $205.88 in income and excess-profits taxes for the year 1919, in connection with which it is claimed he erred in the computation of invested capital for 1918.

FINDINGS OF FACT.

The petitioner, a New York corporation, with principal offices at 50 Court Street, Brooklyn, N.Y., was organized in 1910 with a capital stock of $1,000. Its activities were confined almost exclusively to the purchase and sale of real estate. The books of account of the petitioner consisted of cards on which entries were made for each purchase of property.

At December 31, 1917, the petitioner owned eight pieces of real estate. The cost of, and outstanding mortgage, on each property, together with the petitioner's equity therein at the close of 1917, were as follows:

Property	Cost	Mortgage	Equity
104-A Somers Street	$5,250	$4,000	$1,250
171-3 Rochester Avenue	7,500	4,000	3,500
360 to 363 Broadway	28,425	17,000	11,425
706 Willoughby Avenue	18,650	15,000	3,650
890 Broadway	13,925	11,500	2,425
2111 Dean Street	10,100	6,750	3,350
1974 Eastern Parkway	33,600	21,750	11,850
643 Madison Street (acquired in exchange)			2,200

In the year 1917 the petitioner made a profit of $544. "Loans payable" at the close of 1917 amounted to $7,694.60.

Respondent's determination of invested capital for the year 1919 was absed on invested capital at January 1, 1918, of $18,655.40.

Judgment will be entered for the respondent.