
    Appeal of E. C. McKALLOR DRUG CO.
    Docket No. 1185.
    Submitted March 19, 1925;
    decided April 14, 1925.
    
      L. F. Cooper, R. F. Garrity, and T. J. Neuland, Esqs., for the taxpayer.
    
      Ward Loveless, Esq., for the Commissioner.
    Before Jambs and TRAMmell.
    This appeal involves a deficiency of $5,775.60 in income and profits taxes for the year 1919.
    FINDINGS OF FACT.
    The taxpayer is a New York corporation, with its principal place of business at Binghamton.
    In 1910 a certain horse liniment known as “Macks Thousand Dollar Spavin Remedy” was placed on the market and advertised extensively by the taxpayer. The expenditures made for the advertisement of this horse liniment were not claimed as deductions in the several income-tax returns of the taxpayer but were charged to capital account. The total amount of the expenditures to December 31, 1917, was $45,080.31.
    In 1916 the Department of Agriculture of the United States forbade the use of the words “ Thousand Dollar ” in the advertising of “Macks Thousand Dollar Spavin Remedy,” and in that year the taxpayer discontinued advertising that trade name. At approximately the same time it ceased to manufacture the article under that name and has not since 1916 used the name in connection with its business.
    During 1918 the taxpayer charged off against surplus $22,537.76 of the amount expended in advertising that trade name, and during 1919 it charged off $19,770.47 of said amount, leaving the balance on the taxpayer’s books of $2,772.08, which was so carried on the books and records until December 31, 1924, when it was charged off to profit and loss.
    Subsequent to the filing of the original return for 1919 the taxpayer sought to restore to surplus the amounts previously charged off, and claimed that the amount of $45,080.31 should be included in invested capital for 1919. The taxpayer also sought to deduct from fross income in 1919 the said amount of $45,080.31, or the amount of 19,768.42 representing the amount charged off against surplus during 1919. The Commissioner refused to include in the computation of the taxpayer’s invested capital for 1919 either the amount of $45,-080.31 expended for the advertising of the liniment, or the $22,542.55 appearing in the account on the taxpayer’s books and records on January 1, 1919. The Commissioner also refused to allow the taxpayer as a deduction for the calendar year 1919 either the amount of $45,080.31 representing the advertisement of the remedy expended as aforesaid, or the amount of $19,768.42 representing the amount charged off against surplus during the calendar year 1919, or any other amount.
    As the result of the aforesaid action by the Commissioner, a deficiency was determined against the taxpayer for the year 1919 of $5,775.60, and from this determination this appeal was duly taken.
   DECISION.

The determination of the Commissioner is approved.  