Appeal of Tyler Warehouse Co.

1 B.T.A. 504

• Court: United States Board of Tax Appeals
• Decided: January 31, 1925
• Docket: Docket No. 513
• Status: Published

Opinion

OPINION.

James:

The lease here in question provides for a payment construing the original and supplemental provisions together, of “all the money it receives for storage and otherwise, not exceeding $20,-000 per annum, except such sums as it will need to pay all of its expenses * * * ” and “ in addition to the rents stipulated in the original lease, the further sum of $2,000 per annum * *

This we believe means that the lessee was required to pay as rent the sums set out in the column of figures headed “Available for rent ” up to the sum of $22,000 for the years 1913 to 1918, inclusive, and to the sum of $20,000 for the years 1919 and 1920. As so construed, the sums paid in the years 1913 to 1917 were less than the sums due in the following amounts:

1913_$3,593.32

1914_ 5,381.40

1915_6, 570.92

1916_ 7, 020. 90

1917_ 306. 73

Total_ 22,873. 27

In the year 1918, $22,400 was paid, an excess of $400, leaving a balance due of $22,473.27. In 1919, the taxpayer paid in excess of the rent for that year but on account of back rent then due, the sum of $11,236.99. The entire amount claimed by the taxpayer is therefore an allowable deduction for the year 1919. The balance of rent due and unpaid on account of prior years was therefore at the beginning of 1920 $11,236.28. The taxpayer paid in that year the sum of $24,495.61 in excess of the amount due for rent for that year. Of this sum $11,236.28 is properly deductible as rent due and unpaid for prior years and the sum of $13,259.33 was properly disallowed by the Commissioner. The tax for the year 1920 will be recomputed accordingly and the deficiency determined as hereinbefore provided.