
    Advocate Publishing Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 9711.
    Promulgated April 11, 1927.
    
      Raymond L. Sauter, Esq., for the petitioner.
    
      W. H. Lawder, Esq., for the respondent.
    This appeal is for the redetermination of deficiencies in income taxes for the calendar years 1919, 1920, 1921, and 1922, in the respective amounts of $163, $1,084, $298.47, and $44.72. The errors assigned are (1) that the Commissioner failed to allow the actual value of assets as the base for computing depreciation, and (2) that the Commissioner restored to income an item of $600 paid out in dividends by petitioner. At the hearing petitioner waived the second assignment of error.
    FINDINGS OF FACT.
    Petitioner is a Colorado corporation with its principal office in Sterling, Logan County, Colo., and is engaged in the printing business. It was organized in the year 1911.
    Prior to the year 1923 petitioner maintained no complete system of books and had no inventory of its property, its records consisting of a cash book and a ledger. Its property consisted of printing equipment for the publication of a daily and weekly newspaper and for commercial job printing. In its return for 1918 petitioner claimed a value of $25,000 for physical property. It had no cost records and the value claimed was determined by a survey and listing of the assets and an estimate of their worth. After the respondent brought up the question of its tax liability, petitioner in 1923 attempted to inventory its assets as of 1918 and from catalogues of manufacturers obtained the prices at which the assets could be replaced. In this manner petitioner in 1923 determined the value of its assets as of 1918 to be $35,908.
   OPINION.

Van Fossan:

The sole question in this case is the value in 1918 for depreciation purposes of certain property used in the printing business. No evidence was offered as to the date of acquisition or the cost of the property. Replacement value is not a proper basis for determining depreciation. Greenabaum Bros., Inc., v. Commissioner, 6 B. T. A. 86.

Judgment will be entered for the respondent.  