
    J. R. Burns, Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 12611.
    Promulgated January 8, 1927.
    
      M. A. Matlock, Esq., for the petitioner.
    
      J. Arthur Adams, Esq., for the respondent.
   Millken:

This proceeding results from the determination by respondent of a deficiency in income tax for the calendar year 1921 in the amount of $2,278.81. In the petition as filed two errors were assigned: (1) The failure of respondent to allow a proper fair market price or value as of March 1, 1918, for 520 acres of timberland sold in 1921; (2) the failure of respondent to make an adequate allowance for depreciation and obsolescence on property used in trade or business. At the hearing of this proceeding, counsel for the petitioner specifically waived the second assignment of error, leaving at issue only the March 1, 1913, value of 520 acres of land which were sold by the petitioner in the year 1921.

FINDINGS 03? FACT.

Petitioner is a resident of the State of Arkansas, domiciled at Stuttgart. In 1906 he purchased 520 acres of timberland situate 12 miles south of Eldorado, Ark., for $1,500, and sold the same in 1921 for $26,000. No part of the land purchased in 1906 was under cultivation, nor was any part of the same under cultivation on March 1, 1913. The land was purchased as timberland and the timber on the property was composed of 75 per cent pine, 10 per cent white oak, and the remaining 15 per cent mixed.

Petitioner bought and sold timberlands in the vicinity of Eldorado and had worked under contract with timber companies for the cutting and hauling of logs. During the period from 1906 to 1913, he made a careful forty-acre estimate of the amount of recoverable timber located on the land in question, and determined that the same contained not less than 5,000 feet per acre. Petitioner was offered $5 per thousand feet for the timber during the year 1912 or 1913, but declined the offer, believing his property to be more valuable. The fair market price or value of the land, apart from the timber, on March 1, 1913, did not exceed $1 per acre. The fair market price or value of the 520 acres of land and timber on March 1,1913, which petitioner sold in 1921, was $13,520.

Judgment wül be entered on 15 days'! notice, under Bule 50.  