
    Southwark Realty Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 17654.
    Promulgated February 6, 1929.
    
      Benjamin M. Kline, -Esq., and Samuel J. Henderson, Esq., for the petitioner.
    
      Harold Allen, Esq., and W. B. Lansford, Esq., for the respondent.
   OPINION.

StfRNhagen:

The corporation seeks to include the $25,000 in the cost of the building to be used as the basis for determining gain on its sale. It is only necessary to say that the evidence does not establish that such sum was in fact paid or incurred as an obligation of the petitioner. Petitioner sought to show that such an agreement would have been reasonable. Perhaps so, but as the sole stockholder Webber might as reasonably have omitted it, and, so far as the evidence shows, he did omit it. A voluntary payment to the widow after the sale does not establish cost, even though ratified in 1923.

While this disposes of the issue, it may. be added that from the evidence it is not clear but that Webber may have been compensated before his death out of an amount of $100,000 borrowed by petitioner on second mortgage and turned over to him. A substantial part of this amount, large enough to include the $25,000 in question, remained unaccounted for.

The respondent is sustained.

Judgment will be entered under Rule 50.  