Thomas Music Stores, Inc. v. Commissioner

*1045 Before JAMES, LITTLETON, SMITH, and TRUSSELL.

This is an appeal from a deficiency in income and profits tax for the years 1919 to 1921, inclusive, in the sum of $1,836.63. The appeal was taken under submission on the petition of the taxpayer and answer of the Commissioner, the taxpayer not being represented by an officer or counsel at the hearing.

FINDINGS OF FACT.

The taxpayer is a New York corporation located in Albany, N.Y., and incorporated March 8, 1917, as a successor to a business theretofore conducted by F. W. Thomas as an individual.

F. W. Thomas, on or about March 13, 1915, became a voluntary bankrupt, due to losses theretofore sustained in connection with the said business. At the date of the organization of the taxpayer, the total assets of the receivership were turned over to the taxpayer, amounting to $178,932.21, subject to liabilities of not less than $120,068.54, nor more than $122,068.54, and the net tangibles of the said business amounted to not more than $58,863.67, and not less than $56,863.67.

Upon its organization, the taxpayer corporation issued its capital stock in the sum of*2697 $100,000 par value for the above-mentioned net worth and the alleged good will and going value of the business.

The Commissioner excluded in the computation of the invested capital of the taxpayer the sum of $43,136.33, and from the exclusion of the said amount from invested capital the taxpayer appeals.

DECISION.

The determination of the Commissioner is approved.