Webb v. Commissioner

E. N. WEBB, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Webb v. Commissioner

Docket No. 41613.

United States Board of Tax Appeals

20 B.T.A. 274; 1930 BTA LEXIS 2163;

July 21, 1930, Promulgated

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Respondent's action in exhausting commission paid for securing a 99-year lease ratably over the life of the lease sustained.

W. F. Gibbs, Esq., for the respondent.

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ARUNDELL

ARUNDELL: This proceeding, submitted on the pleadings, involves the redetermination of a deficiency of $140.51 in income tax for the year 1924.

Petitioner, a resident of Miami, Fla., and his wife, on September 10, 1924, entered into a 99-year lease, effective October 1, 1924, with Lorraine G. Smith, Inc., covering lots 8 and 9 of block 21 north, Miami, Fla. In 1925 petitioner paid to C. A. Peters a commission to $4,500 for securing said lease. Petitioner and respondent both agree that the commission should be treated as a capital expenditure, but they differ as to the period over which it should be spread. Respondent proposes to prorate the commission over the life of the lease, and petitioner contends that it should be spread over a period of 34 months, at the expiration of which the lease is alleged to have been canceled. But the allegation of petitioner that the lease was canceled on August 5, 1927, by court order has been denied by respondent in his answer and we are left with no evidence on the mooted question. It follows that the respondent must be sustained. ; ; ; .

Decision will be entered for the respondent.