
    Appeals of M. C. STOCKBRIDGE, MRS. M. C. STOCKBRIDGE, MRS. ALICE D. HENDERSON, Executrix, S. H. HENDERSON, JR., MRS. S. H. HENDERSON, JR.
    Docket Nos. 1866, 1867, 1875, 1916, 1917.
    Submitted May 20, 1925.
    Decided July 11, 1925.
    1. Accelerated depreciation allowed.
    2. Reserve for unaccrued liability disallowed.
    
      Lee I. Pa/rh, Esq., for the Commissioner.
    Before Ivms and MoRRis.
    These appeals were heard together upon the pleadings and a deposition, from which the Board makes the following
    FINDINGS OP PACT.
    The taxpayers, during the fiscal year ended June 30, 1919, were copartners engaged in business in Shreveport, La., under the name of Henderson Cotton Oil Co.
    In the return of the partnership for the fiscal year ended June 30, 1919, a deduction was taken from income in the amount of $22,000, representing estimated liability of the partnership for oil sold not meeting the standard required by chemical analysis. No claims had then been presented by purchasers. The partnership at first entered the estimates on its books at $15,000, $6,000, and $9,000, respectively, but subsequent to June 30, 1919, and before the closing of the books, reduced the respective estimates to $10,000, $5,000, and $7,000. After the close of the fiscal year, claims were presented by purchasers and settled as follows through payments by the partnership :
    July 25, 1919_-_$9,844. 01
    Sept. 25, 1919_ 1, 888. 98
    April 30, 1920_ 6,710.00
    18,442.99
    The balance, $3,557.01, was included in the income of the fiscal year ended June 30,1920.
    In its tax return the partnership deducted depreciation in the amount of $19,786.87. The Commissioner disallowed $9,570.05 on the ground that it was depreciation applicable to the prior fiscal year but not then taken by the partnership.
    A reasonable allowance for depreciation applicable to the fiscal year ended June 30, 1919, is $29,698.73, due to the continuous day and night operation of the partnership plant.
    
      The Commissioner determined deficiencies in the following amounts:
    M. C. Stockbridge_$870.79
    Mrs. M. O. Stockbridge_ 870.79
    Mrs. Alice D. Henderson, Executrix (not stated).
    S. H. Henderson, Jr_ 748. 57
    Mrs. S. H. Henderson, Jr_ 748. 57
    From these determinations the taxpayers, respectively, duly filed their appeals to this Board.
    DECISION.
    The deficiencies should be computed in accordance with the following opinion. Final determination of the Board will be settled on 10 days’ notice, in accordance with Bule 50.
   OPINION.

Ivins:

We are satisfied by evidence submitted by the taxpayers-,, and uncontroverted, that depreciation should be allowed the partnership for the fiscal year ended June 30, 1919, in the amount of $29,698.73.

The item of $22,000 was not a proper deduction for the fiscal year in question. At the end of that year it represented not an accrued liability but a reserve.

During the fiscal year in question claims existed only in contemplation, not in fact. They did not arise and so accrue until after the-close of the fiscal year. Appeal of Consolidated Asphalt Co., 1 B. T. A. 79; Appeal of Henry Reubel, 1 B. T. A. 676; Appeal of Uvalde Co., 1 B. T. A. 932; Appeal of William J. Ostheimer, 1 B. T. A. 18.  