Appeal of COMMONWEALTH REALTY CO.

Docket No. 382. 

The evidence does not warrant a finding that an alleged account receivable of $39,526.67 should be Included in invested capital for the years 1920 and 1921.
Submitted December 10, 1924; decided December 29, 1924.

F. A. Tkvlin. Esq., for the taxpayer.
R. A. Littleton, Esq. (Nelson T. Hartson, Solicitor of Internal Revenue), for the Commissioner.
Before Littleton, Smith, and Sternhagen.

From the evidence of record and from oral testimony given at the hearing the Board makes the following

FINDINGS OF FACT.
1. The taxpayer is a Wisconsin corporation with its principal office at 114 Grand Avenue, Milwaukee, Wis.
2. A deficiency letter was mailed to the taxpayer on or about August 14, 1924, showing additional taxes due for 1920 and 1921 as follows :
1920 $546.20 1921 1,833.24
An appeal from the proposed assessment of these additional taxes has been duly taken to this Board.
3. In its income-tax returns for 1920 and 1921 the tax payer included in invested capital $39,526.67 representing an alleged account receivable from one Max Goldstine, the presi dent and principal stockholder. This amount was excluded from claimed invested capital by the Commissioner upon the audit of the return.
4. The $39,526.67 represents either an amount advanced by the taxpayer corporation to Mr. Goldstine or an amount paid by the corporation representing indebtedness to Mr. Goldstine. The cash book of the corporation for 1915 shows that Mr. Goldstine was charged with the advance. InOctober,1917,the item was credited back to him (journal, folio 49) and a charge made to the Caswell Building Account. Auditors making an examination of the tax payer's books of account decided that the charge to the Caswell Building Account was in error and they accordingly restored the charge to Mr. Goldstine. The amount remained on the books as a charge to Mr. Goldstine until August. 1922, when it was written off to surplus. No interest upon the loan was ever paid by Mr. Gold stine and no note was ever given by him evidencing the indebtedness.

DECISION.
The determination of the Commissioner with respect to the de ficiencies in tax found for the years 1920 and 1921 are approved.