
    Appeal of THOMAS J. BAKER, JR., & CO.
    Docket No. 1176.
    Submitted May 11, 1925.
    Decided June 9, 1925.
    
      Roy T. Baker for the taxpayer.
    
      Ward Loveless, Esq., for the Commissioner.
    Before Graupner, Trammell, and Phillips.
   The taxpayer appeals from a determination by the Commissioner of a deficiency in income and profits taxes for the year 1919 amounting to $1,626.22. It alleges that the Commissioner erred in refusing the taxpayer classification as a personal service corporation.

The Commissioner also allowed a deduction for depreciation based on $13,000 of buildings and improvements. The taxpayer claims that the basis should have been $15,181.76, but presented no evidence of original cost or allocation as between land value and building value.

It was also alleged that the Commissioner erroneously included in income dividends of $402 not received by the taxpayer.

FINDINGS OF FACT.

The taxpayer is a North Dakota corporation doing business at Fargo, N. Dak. During 1919 the business was conducted by two brothers, Julius R. Baker and Eoy T. Baker. The company was general agent for the St. Paul Fire Insurance Co., Maryland Casualty Co., and The Security Insurance Co., and obtained the greater part of its business through subagents. It received a commission on all business written in this way by its subagents throughout the territory for which it was general agent. It also wrote insurance in these companies as local agent at Fargo.

In 1914 the taxpayer purchased a plot of land with an office building thereon for $14,000, which property it used for office purposes. In 1917 it spent $1,181.76 for improvements on the property, which it claimed as a deduction in its 1917 income-tax return as expense but which item was disallowed.

From the record it does not appear that the dividends of $402 were included in computing the taxpayer’s net income.

DECISION.

The determination of the Commissioner is approved.  