
    Charles H. Merillat, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 10594.
    Promulgated December 23, 1927.
    
      Charles H. Merillat, Esq., pro se.
    
      W. H. Lawder, Esq., for the respondent.
   OPINION.

GReen :

We are of the opinion that the total payments of $1,203,-45 itemized in the findings of fact constitute rentals and as such are deductible under section 214(a) (1) of the Revenue Act of 1921, which provides that in computing net income there shall be allowed as deductions:

* * * Rentals or oilier payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity.

Some of the payments were termed in the leases as “advanced royalty” and by the express provisions of the leases they could not be credited against any production other than that of the current year. Under such circumstances, we believe the amounts paid as such are deductible in the current taxable year.

The petitioner gave some testimony as to payments in 1921 of $50 for a bond, $5 for making a record, and $10 for certain desired information, but as the petition did not assign any error with respect to such items we have not considered thorn in this opinion.

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

Considered by Sternhagen, Lansdon, and ARtjndell.  