Appeal of HAWKS NURSERY CO.

Docket No. 1469.

Submitted May 6, 1925; decided May 23, 1925.

Charles H. Hawks, Jr., for the taxpayer.
W. Frank Gibbs, Esq., for the Commissioner.

Before Graupner and Tkammell.

This is an appeal from a deficiency in the amount of $566.67, in come and profits taxes for the
calendar year 1920. The sole issue before the Board is the March 1, 1913, value of the land
described in the findings.

FINDINGS OF FACT.

1. Taxpayer was a New York corporation doing business during the year 1920 in the City of
Rochester, N e w York.
2. In the year 1902 it purchased two acres of land lying without the limits of the City of
Rochester, for which it paid the sum of $2,000. This land was acquired for business purposes of
the cor poration and various structures were erected upon it subsequent to the date of purchase.
3. Subsequent to the acquisition of the property by the taxpayer in 1902, and some time prior to
1909, the corporate limits of Roches ter were extended to include the property acquired by the
taxpayer, and the surrounding property was subdivided into blocks and lots for sale as city lots.
4. In 1920 the taxpayer sold the real property in question for the sum of $10,423. In its income-
tax return filed March 15, 1921, the taxpayer reported the March 1, 1913, value of the buildings
to be $2,500 and of the land to be $5,600, or a total of $8,100, and, in the paymentofitstaxes,
paiduponaprofitof$2,323. Inauditingthe return the Commissioner allowed the valuation of $2,500 on
the buildings, but disallowed the March 1, 1913, value of $5,600 placed upon the land, on the
ground that the evidence as to value which was submitted by the taxpayer was insufficient. The
Commissioner took the cost of $2,000 in the year 1902 as the proper value for the land and
asserted that a profit of $5,923 had been realized. The deficiency results from the difference
between the value of the land allowed by the Commissioner and the March 1, 1913, value claimed by
the taxpayer.
5. The fair market value of the land was $5,600 on March 1, 1913.

DECISION.

The deficiency determined by the Commissioner is disallowed.