
    Twin City Sand & Gravel Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 7171.
    Promulgated April 12, 1928.
    
      George G. EUshury, Esq., for tbe petitioner.
    
      Arthur E. Murray, Esq., for the respondent.
   OPINION.

MokRis :

The sole question involved in this proceeding is the March 1, 1913, value for depletion purposes of the sand and gravel deposit owned by the petitioner on that date.

Petitioner is contending for a value of $22,640.88, the difference between the sale price of the capital stock to Plummer on September 10, 1913, and the March 1, 1913, stipulated value of the physical assets other than land.

Plummer was fortunately situated with respect to the property. He had actually conducted the business for more than two years prior to the date of purchase of the stock and was certainly in a position to judge whether $40,000 was an exorbitant price. He testified that the purchase price in his opinion represented the fair and reasonable value of the property, and further that the difference between the stipulated value of the physical assets and the purchase price represented the value of the deposit.

It is our opinion, therefore, that the fair market value of the petitioner’s deposits on March 1, 1913, was $22,640.88, and the depletion allowances for the taxable years in question should be based on that value.

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