Lesser v. Commissioner

OPINION.

Marquette:

The facts in this case and the issues raised by the pleadings are identical with those in the case of Daniel S. Markowitz v. Commissioner, 8 B. T. A. 1100, decided by this Board on October 31, 1927. Upon the authority of the decision in that case we hold that the Crescent Theatres, Inc., in computing its net income for 1920, is entitled to deduct the amount of $2,750 as an allowance for the exhaustion, wear and tear, of the assets used in its business. We also hold that the Crescent Theatres, Inc., purchased the Lodi Theatre lease and equipment in 1919 for $17,500 and sold them in 1920 for $30,000. The profit realized from the sale was, therefore, the difference between the depreciated cost and the sale price, instead of $9,500, the amount reported by the corporation.

The respondent’s action in computing the excess-profits tax of the Crescent Theatres, Inc., under section 302 of the Revenue Act of 1918, is approved.

Judgment will Toe entered under Rule 50.