
    Bay Ridge Land & Improvement Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 21217.
    Promulgated May 9, 1929.
    
      Richard Bennett, Jr., Esq., for the petitioner.
    
      JoTm E. Marshall, Esq., for the respondent.
   OPINION.

Trammell :

The respondent determined a deficiency in income tax for the calendar year 1922 in the amount of $1,923.57, based upon the profit alleged to have been derived by the petitioner from the sale in 1922 of certain real estate acquired in 1905. The only issue raised by the pleadings is the March 1,1913, value of said property.

In 1905 the petitioner acquired, among others, two parcels of unimproved real estate situated on Fourth Avenue, at 62nd Street and 68th Street, respectively, in the Borough of Brooklyn, New Yorb City. This property was purchased in anticipation of a rise in value which would follow the location of the subway along Fourth Avenue. Within a few months after the purchase of said property by the petitioner, the route of the subway on Fourth Avenue was approved. Work of construction was commenced in the latter part of 1909, and the subway was completed to 59th Street, within approximately three blocks of one of the petitioner’s parcels of land, and within about nine blocks of the other, in December, 1912, at which time construction of the next section of the subway to 89th Street, beyond the petitioner’s property, was begun. There was a material rise in the value of property along Fourth Avenue and in the vicinity of the petitioner’s property during the years from 1905 to 1912, and the increased value attributable to the building of the subway accrued very largely, if not entirely, prior to March 1,1913.

In 1922 the petitioner sold the parcel of land at Fourth Avenue and 62nd Street, consisting of five lots, for $23,500, and the parcel located at Fourth Avenue and 68th Street, consisting also of five lots, was sold in the same year for $30,000. In its return for 1922 the petitioner computed its profit or loss on the sale of said property on the basis of a fair market value at March 1, 1913, of $25,000 for the first parcel and a value of $30,000 for the second parcel. The respondent determined the March 1, 1913, value of the first parcel at $19,950, and of the second parcel at $17,412.50. The record discloses that the second parcel, namely, that located at Fourth Avenue and 68th Street, was in a somewhat better neighborhood, and consequently had a higher value than the first parcel at Fourth Avenue and 62nd Street.

Upon consideration of all the evidence, including the testimony of two witnesses qualified by experience to express an opinion, we are satisfied that the parcel at Fourth Avenue and 62nd Street had a fair market value at March 1, 1913, of $20,000, and that as of said date the parcel at Fourth Avenue and 68th Street, had a fair market value of $26,000. The deficiency should be redetermined accordingly.

Judgment mil ~be ent&í'ed v/nder Rule 50.  