OPINION.
Phillips :
Petitioner claims a loss for the obsolescence of its good will, trade names and trade brands. It bas, heretofore been held that such items are not the subject of an obsolescence deduction within the meaning of the Act. Red Wing Malting Co. v. Willcuts, 15 Fed. (2d) 626; Appeal of Manhattan Brewing Co., 6 B. T. A. 952; William Zakon v. Commissioner, 7 B. T. A. 687.
We have held, however, in the last cited case that a loss may be had in the year in which such property is abandoned or becomes worthless. The difficulty here is to determine, if possible, what may be considered as the cost of a trade-mark, built up by advertising in the course of the years. From 1913 to 1917 petitioner spent $30,820.62 in advertising its one product. No doubt a part of this cost resulted in an immediate benefit to the petitioner and was reflected in its current sales. At least, petitioner appeared to believe so, for it charged off the entire amount at once. Perhaps another part of this expenditure for advertising might be considered as creating a permanent good will. Certainly all sums spent in advertising a trade-marked product are not to be considered as the cost of the trade name. Here we meet the same situation as confronted us in Northwestern Yeast Co., 5 B. T. A. 232, and Richmond Hosiery Mills, 6 B. T. A. 1247, being without any evidence of the basis on which the cost of advertising the product may be divided between current annual expense and the creation of a capital asset. Any apportionment we might attempt would be unsupported by evidence and would scarcely rise to the dignity of a guess. In the circumstances, no deduction can be allowed. Since the petitioner has had the benefit of these deductions in computing its taxable income in the years in which the advertising took place, it does not appear that any injustice will result.
The petitioner claims that it should be entitled to a deduction in the taxable years for the discontinuance of the use of two-thirds of its cellar building and the 8 steel vats and 50 wooden vats which were no longer used. The evidence is sufficient to permit a computation to be made of the depreciated cost of these items, if any deduction is proper. So far as the vats on which deduction is claimed are concerned, it appears that petitioner abandoned their use on November 3, 1919, never used them thereafter and that they have no salvage value. In our opinion their depreciated cost may be deducted as obsolescence over the period from December 18, 1917, to January 16, 1920. Appeal of Manhattan Brewing Co., supra. We fix January 16, 1920, the effective date of the National Prohibition Act, as tht~ ¡expiration of the period, rather than November 3, 1919, because ii w&s not certain until this later date that the equipment could not again be used.
A different situation arises with respect to the building. While petitioner discontinued the use of two-thirds, there is nothing in the record to indicate that this structure was obsolete or becoming so. It is not sufficient to sustain a deduction to show only that the building can not be used in the petitioner's business. It is entirely possible that such a building was convertible for use in some other business in which refrigeration was necessary. There is no evidence that any effort was made to dispose of the building, or to find any other use for it. The action of the Commissioner in refusing to allow any obsolescence on the building must be approved.
Decision will be entered on 15 days'1 notice, nmder Rule 50.
Considered by Marquette, MillieeN, and VaN FossaN.