
    Shaw-Hayden Building Co., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 13130.
    Promulgated January 30, 1930.
    
      Samuel Horwitz, Esq., and M. T. Walpaw, Esq., for the petitioner;
    
      John D. Kiley, Esq., for the respondent.
   opinion.

Van Fossan:

This case, in which respondent determined a deficiency in income taxes of $567.95 for the year 1921, was submitted for decision on the sole question of law whether certain expenditures made by the petitioner to clear the title to property purchased by it were capital expenditures or constituted ordinary and necessary expenses. The pertinent allegation of the petitioner, admitted by counsel for respondent at the hearing and forming the basis of the submission, reads as follows:

Taxpayer purchased from the court and the receiver certain property for a definite sum, and upon acquiring the property it was discovered that the taxpayer could not receive what it purchased unless it paid this additional sum of $7,673.84, for obligations which were in the nature of liens against this property.

The expenditures are so clearly in the nature of capital expenditures that no argument is necessary to sustain a holding to this effect. Counsel for petitioner cites no case or precedent for his position and advances no argument of merit. To state the question is to suggest the anwser. It is difficult to conceive of expenditures more clearly of a capital nature than those entailed in a process of perfecting or clearing the title to property. Nor does it require argument to demonstrate that these expenditures to secure the removal of liens added to the value of the property. Though not a part of the price originally fixed by the court, they were part of the cost of acquiring the property and as such are capital expenditures.

Decision will be entered for the respondent.  