
    R. L. Crook and Estate of Mrs. R. L. Crook, Petitioners, v. Commissioner of Internal Revenue, Respondent.
    Docket Nos. 2646, 2647.
    Decided October 27, 1926.
    The valuation of stock and bonds determined by the Commissioner not shown by the evidence to have been incorrect.
    
      Pike IIall, Jr., Esq., for the petitioners.
    
      W. Prank Gibbs, Esq., for the respondent.
    This is a proceeding for the redetermination of deficiencies in income tax for 1919, in the amount of $1,379.97 with respect to the estate of Mrs. R. L. Crook, and $609.39 with respect to R. L. Crook. The two appeals were consolidated.
    FINDINGS OF FACT.
    The taxpayer, R. L. Crook, and his wife, the decedent, whose estate is the other petitioner, were married and living together in Louisiana during 1919. During that year R. L. Crook was the owner of 50 per cent of the stock of the Pine Island Refining Co. That corporation sold its assets to the International Oil & Gas Corporation, a newly organized corporation having an authorized capital stock of $10,000,000, in exchange for $10,000 of first mortgage bonds and $25,000 in stock. During 1919 the Pine Island Oil & Refining Co. was liquidated and dissolved and distributed its assets to its stockholders, of which R. L. Crook received $5,000 of the mortgage bonds, $12,500 in stock, and $15,000 in cash. The interest on the bonds was payable semiannually and was regularly paid until 1923.
    Both R. L. Crook and his wife, in their returns for 1919, returned the bonds at a valuation of 85 cents on the dollar and the stock at no value. The Commissioner increased the valuation to par, resulting in the deficiencies. >
   OPINION.

Trammell :

The valuation of the stock and bonds is the only question involved in this appeal. That is purely a question of fact. The Commissioner determined that each was worth par at the- time received in liquidation. The burden of proof is upon the taxpayers to show that they did not have that value. This the taxpayers have failed to do. R. L. Crook testified that he made inquiry as to the value of the stock and bonds and wrote to the investment bankers in Chicago who underwrote the securities for the International Oil & Gas Corporation when it was organized, and that they advised that they did not have any market for them. Crook sold some of the stock in 1920 at less than par. He did not sell any of the bonds, although he undertook to do so. The evidence, however, does not indicate what efforts were made about the time the stock and bonds were received from the Pine Island Refining Co. in 1919. The Commissioner concedes that the stock and bonds became worthless subsequent to the time they were received by the taxpayers, but there is not sufficient evidence in the record to overcome the presumption of the correctness of the determination of the Commissioner as to the values at the time received.

Judgment will he entered for the Commissioner.  