Appeal of HONOMU SUGAR CO.

Appeal of HONOMU SUGAR CO. Docket No. 1355. Submitted May 28, 1925. Decided July 14, 1925. M. N. Fisher, Esq., for the Commissioner. Before James, Littleton, Smith, and Tetjssell. This is an appeal from the determination of a deficiency in income and profits tax for'the year 1920 in the amount of $73,628.60. The issue is the method of measuring the loss on the sale of securities. FINDINGS OP PACT. The taxpayer is a corporation organized under the laws of the Territory of Hawaii, with its principal office at Honolulu. Prior to March 1, 1913, the taxpayer purchased 790 shares of stock of Sugar Factories Co., Ltd., at a cost of $79,000. In 1920,. the taxpayer sold the stock for $31,584.20. In its income-tax return for 1920, the taxpayer claimed that the stock had a fair market value on March 1, 1913, of $240,428.60, and deducted in its return as its alleged loss the amount of $208,844.40. The Commissioner in the audit of the taxpayer’s return limited the loss to $47,415.80, the-difference between the cost of the stock and the selling price thereof,, and determined the deficiency here in issue. DECISION. The determination of the Commissioner is approved. [MAJORITY — James:] OPINION. James: The decision in this appeal is governed by the decisions of the Supreme Court in United States v. Flannery, 268 U. S. 98, and McCaughn v. Ludington, 268 U. S. 106, decided April 13, 1925.