
    Mary E. Hanlon, Petitioner, v. Commissioner of Internal Revenue, Respondent. Elizabeth Henaghan, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket Nos. 27251, 27252.
    Promulgated May 29, 1929.
    
      Walter D. Wall, Esq., for the petitioners.
    
      M. E. McDowell, Esq., and B. Schlosser, Esq., for the respondent.
   OPINION.

Smith :

The question presented by these proceedings is purely one of law, namely, whether the allowance for depreciation permitted by the Eevenue Act of 1921 as a deduction from gross income should be based upon the cost of the properties to the donor or upon the value of those properties at the date of acquisition by the petitioners which was October 1, 1921. In Magdaline McKinney, 16 B. T. A. 804, we held that the basis for depletion under the Eevenue Act of 1921, where property was acquired by gift subsequent to December 31, 1920, was the fair market value of the property at the date of the gift. The same rule must apply in the computation of an allowance for depreciation. Cf. United States v. Ludey, 274 U. S. 295. Upon the basis of the decision in Magdaline McKinney, supra, it is held that the allowance for depreciation should be based upon the value of the properties at the date of gift.

Judgment will Tee entered under Rule 50.  