*448OPINION.
TRUssedl:The lease was acquired by two individuals in June, 1913. Between that date and July 6, 1914, when the lease was turned *449over to the petitioner, numerous improvements had been made in the adjoining neighborhood. A subway station was located at the corner oí the property, and several multi-floor apartment houses were built in the immediate section. About one month after the original lease was acquired, a one-third interest was sold to Sydney S. Cohen for a consideration which would indicate that the leasehold had a value between $15,000 and $30,000. Sydney S. Cohen, a man of wide experience in theatrical ventures and leases, testified that in his opinion the lease was worth at least $30,000 and that the consideration furnished by A. J. Norton had a value in excess of $20,000. A. J. Norton and George Balsdon with full knowledge of the value at which the leasehold was to be turned in to the corporation, 'agreed to equip the theater in consideration of the issuance to them of $20,000 par value of stock. The amounts which were subsequently spent by them, as supported by various vouchers, and the testimony of Sydney S. Cohen in respect thereto, would indicate that an estimate of $20,000 for furnishing and equipment of the theater was conservative. The vouchers submitted, together with Mr. Cohen’s testimony, and the provisions of the contract with Norton and Balsdon, convince us that the furnishings and equipment as completely installed by Norton and Balsdon were worth the $20,000 claimed. The determination of this point strengthens the valuation of $30,000 for the leasehold, since Norton and Balsdon, as experienced men in the operation of theatres and the valuation of theatrical property, would no', be willing to accept a two-fifths interest in the company by expending $20,000 in cash and services, unless they believed the leasehold had a value of at least $30,000.
Accordingly, we are of the opinion that $30,000, the value of the leasehold, and $20,000, the value of furnishings and equipment, should be included as invested capital at acquisition and should be the basis for computing invested capital for the year 1921.
Since the leasehold is subject to exhaustion, the petitioner is entitled to deduct from income each year an aliquot part of $30,000, its cost, based upon a life of 20 years, 2 months and 25 days.
The respondent and the petitioner are apparently in agreement as to the depreciation rate on furnishings and equipment. The petitioner is entitled to use as a basis for depreciation the value of $20,000 for furniture and equipment acquired for stock, in place of $12,-664.30, used by the respondent.
The deficiency may be recomputed in accordance with the foregoing findings and opinion upon 15 days’ notice, pursuant to Rule 50, and judgment will be ente/red accordingly.