
    T. H. Johnson, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 6870.
    Promulgated June 28, 1927.
    1. Loss on sale of stock determined from the evidence.
    2. Petitioner admits increase in income representing his distributive share of partnership income.
    
      W. W. Boss, Esq., for the petitioner.
    
      J. E. Marshall, Esq., for the respondent.
   Geeen:

This proceeding results from the determination by the Commissioner of a deficiency in income taxes for the calendar year 1920 in the amount of $2,164.47. The error assigned in the petition is that the Commissioner refused to allow as a deduction from gross income an alleged loss of $20,800 on the sale in 1920 of stock in the Ohio Consolidated Coal Co. The respondent was granted leave to amend his answer by alleging that the petitioner received $4,927.25 in 1920 as representing petitioner’s distributive share of the income of Glennova Coal Co., a partnership, which was admitted by the petitioner at the hearing.

FINDINGS OF FACT.

The petitioner is a citizen of the State of Ohio. In 1916 he purchased 83 shares of stock in the Lewiston Block Coal Co., for $8,300. In 1917 or 1918, he purchased 165 shares of stock in the Ohio Consolidated Coal Co. for $16,500. About four months later he exchanged the 83 shares of Lewiston stock for 83 additional shares of Ohio Consolidated. The fair market value of each of the stocks on the date of exchange was par, namely, $8,300. The cost of the 83 shares of stock in the Ohio Consolidated was therefore $8,300. In 1920 he sold the 248 shares of the Ohio Consolidated Coal Co. for $4,000, thereby sustaining a deductible loss of $20,800. The Commissioner allowed no part of this loss in determining the deficiency.

During 1920, the petitioner was a partner in the Glennova Coal Co. His distributive share of income for that year was $4,927.25. He did not report any of this amount in his 1920 return.

The income determined by the Commissioner should be increased by $4,927.25 and decreased by $20,800.

Judgment will he entered on 15 days’ notice, under Buie 50.  