
    John Tonningsen and Pauline E. Tonningsen, Petitioners, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 39479.
    Promulgated March 16, 1931.
    
      J. S. Wallace, Esq., for the petitioners.
    
      Hartford Allen, Esq., for the respondent.
   OPINION.

Teussell:

We have held that a commission paid to real estate brokers for procuring a lease is not an ordinary and necessary business expense deductible from gross income for the year in which paid, as contended by petitioners, but that such a commission constitutes a capital expenditure, deductible ratably over the term of the lease, although the taxpayer is on the cash receipts and disbursements basis. Spinks Realty Co., 21 B. T. A. 674; Mary C. Young et al., 20 B. T. A. 692; S. M. Clawson, 19 B. T. A. 1253; and the authorities cited therein. Those decisions are controlling in the instant case and accordingly the respondent’s action of allowing as a deduction for 1924 a sum representing one ninety-ninth of the said commission paid, is approved.

The fact that the petitioners are elderly and have a comparatively short life expectancy and that the lease gives the lessee an option to purchase the property at some future date which at present is not determinable, does not in our opinion take the instant case out of the rule laid down in the above cited cases, as contended by petitioners, for such facts do not change the character of the expenditure so far as the taxable year 1924 is concerned.

Judgment will be entered for the respondent.  