Bedell & Ogg Co. v. Commissioner

BEDELL & OGG CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Bedell & Ogg Co. v. Commissioner

Docket No. 13702.

United States Board of Tax Appeals

9 B.T.A. 1381; 1928 BTA LEXIS 4237;

January 17, 1928, Promulgated

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1. PRORATION OF PRIOR YEAR'S TAXES AND REDUCTION OF INVESTED CAPITAL THEREBY. - Approved, pursuant to section 1207 of the Revenue Act of 1926.

2. INADMISSIBLE ASSETS. - Deficiency letter shows that the Commissioner reduced petitioner's invested capital by a proportion thereof, which computation appears to have been made in accordance with the Revenue Act of 1918 and the regulations with respect thereto.

Harry L. Ogg, for the petitioner.

F. O. Graves, Esq., for the respondent.

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TRUSSELL

The petitioner complains of the respondent's assertion of a deficiency in income and profits tax in the amount of $794.91 for the year 1920, and an overassessment in the amount of $645.64 for the year 1921.

The petition alleges that respondent erred in reducing petitioner's invested capital for 1920 and 1921 by deducting therefrom the prior year's taxes prorated and also certain alleged inadmissibles. The proceeding has been submitted upon the pleadings.

FINDINGS OF FACT.

Petitioner is a California corporation with its principal office at Los Angeles.

Respondent reduced petitioner's invested capital for 1920, by $2,136.56 representing the prorated amount of the 1919 income-tax liability and further reduced said invested capital by $1,210.55 on account of certain alleged inadmissibles. Respondent reduced petitioner's invested capital for 1921 by $8,238.77, representing the prorated amount of the 1920 income-tax liability, and further reduced said invested capital by $3,610.11 on account of certain alleged inadmissibles.

OPINION.

TRUSSELL: The deficiency letter from which this appeal is taken shows an overassessment for the year 1921 and therefore the Board has no jurisdiction as to that year under the rule laid down in , and .

The Commissioner, in his computation of petitioner's invested capital, prorated its prior year's taxes and reduced said capital thereby, apparently in accordance with regulations. Pursuant to section 1207 of the Revenue Act of 1926, the Board must consider such computation as having been correctly made.

The deficiency letter, a copy of which is attached to the petition, shows that the Commissioner found listed on petitioner's balance sheet as an asset, stock of the Owners Oil & Supply Co., a domestic corporation; that such stock being a so-called inadmissible asset under the provisions of section 325(a)(4) of the Revenue Act of 1918, he caused petitioner's invested capital to be reduced by a proportion thereof as provided by section 326(c) of said Act, and his computation is apparently in accordance with the Revenue Act and article 852, Regulations 45, in respect thereto.

Judgment will be entered for the respondent.