Farm Implement Co. v. Commissioner

6 B.T.A. 1069, 1927 BTA LEXIS 3346

• Court: United States Board of Tax Appeals
• Decided: April 26, 1927
• Docket: Docket No. 9823.
• Status: Published

Opinion

OPINION.

Trammell :

In our opinion, the determination of income, under the facts in this case, made by a comparison of the net worth at the close of the year with the net worth at the beginning of the year, is the correct and proper method of determining the income of the petitioner. In the Appeal of Index Notion Co., 3 B. T. A. 90, we said:

Where books oí account are maintained by the single-entry method of bookkeeping, the determination of net income is made by comparison of the net worth at the close of the year with the net worth at the beginning of the year.

The testimony of the petitioner was to the effect that certain assets as shown by the boobs as of December 31, 1919, were overstated and that certain assets shown by the books at the end of 1920 were overstated.

Upon tbe evidence we are not convinced tliat tbe net worth as determined by the respondent at the end of 1919 has been incorrectly stated. On the protest of the petitioner the respondent made a reduction in the values of assets and the evidence does not convince us that the assets should be further reduced in value at the end of 1919.

With respect to the balance sheet at the end of 1920, it appears that the respondent has determined the value of a truck at $1,200 when the cost thereof was $1,061, with $37 freight charges, making a total of $1,098. This truck should not be included in the balance sheet at a greater amount than $1,098. This reduces the net worth ■at the end of 1920 by $102, resulting in a reduction of the net income by that amount.

Judgment will he entered on 15 days’ notice, under Rule 50.