
    Appeal of E. J. BARKLOW.
    Docket No. 4021.
    Submitted August 20, 1925.
    Decided February 11, 1926.
    
      E. J. Barhlow pro se.
    
      B. H. Saunders, Esq., for the Commissioner.
    Before Love.
    This is an appeal from the determination of a deficiency in income tax for the year 1923 in the amount of $169.19.
    FINDINGS OE FACT.
    In March, 1919, the taxpayer purchased bonds of the University Heights Farms Co., of Darby, Mont., in the amount of $5,000. A year later he purchased additional bonds from this company in the amount of $1,000. The venture was unsuccessful and the bondholders took over the property. They were also unsuccessful and, during 1923, the bonds were surrendered to the trustee, the Merchants Trust & Savings Bank, of St. Paul, Minn., the property being taken over by the creditors of the bondholders.
    
      The creditors then organized, under the laws of Delaware, the Maclntosh-Morello Orchards, Incorporated, main office at Darby, Mont.
    In the reorganization the bondholders of the University Heights Farms Co. received second preferred stock of the new company in the ratio of one share of stock of the par value of $100 to each $200 face value of the bonds.
    ’ This gave the taxpayer, for his $6,000 in bonds of the University Heights Farms Co., $3,000 par value of the second preferred stock of the Maclntosh-Morello Orchards, Incorporated.
    The taxpayer claimed, and the Commissioner denied, a loss of $3,000, being the difference between the par value of the bonds and the par value of the stock received by the taxpayer in exchange for the bonds. There was no evidence of the market value of the stock.
   DECISION.

The determination of the Commissioner is approved.  