
    Appeal of WINSOR & JERAULD MANUFACTURING CO.
    Docket No. 1900.
    Submitted May 15, 1925.
    Decided June 10, 1925.
    
      Frwnh G. Lawton for the taxpayer.
    
      Ellis W. Manning, Esg., for the Commissioner.
    Before James, Littleton, and Smith.
   This is an appeal from a determination of a deficiency in income tax for the year 1919, amounting to $786.11.

FINDINGS OF FACT.

The taxpayer is a Maine corporation, with its principal office in Providence, R. I. It was organized in the year 1900 with a capital stock of $50,000.

At that time the capital stock of the corporation was issued in the amount of $30,100 for two patents theretofore issued by the Patent Office, and the remainder of the capital stock was paid for in cash.

The patents in question expired in the years 1915 and 1916, and, prior to that time, were written off the books of the corporation. Notwithstanding the expiration of the patents, they have continued to be the basis of the taxpayer’s business, due to the fact that the appliances manufactured under them required specialized knowledge in their manufacture, and, for the taxable years here in question, and, indeed, to the present time, these appliances have not been successfully manufactured by competitors.

In making its income-tax return for the taxable year 1919, the taxpayer restored to invested capital the sum of $30,100, the original cost of the patents, less depreciation for certain years subsequent to 1916, and claimed as actual invested capital for the taxable year the sum of $20,331.50 as the value of the patents for that year, subject to inclusion in invested capital. The Commissioner, in the audit of the taxpayer’s return, denied invested capital in this amount and asserted a deficiency, and from the deficiency so asserted the taxpayer’ brings this appeal.

DECISION.

The determination of the Commissioner is approved. Appeal of Even Realty Co., 1 B. T. A. 355; Appeal of Union Metal Manufacturing Co., 1 B. T. A. 395.  