This appeal is from the determination of a deficiency in income and profits taxes for the year 1919 in the amount of $99.28.
Two questions are involved: Whether the taxpayer is entitled to deduct in 1919 depreciation on a patent application, patent for which did not issue until 1921; and whether the taxpayer is entitled to deduct the Wisconsin income tax as an accrued liability of 1919 ?
The appeal was submitted on a stipulation of facts.
FINDINGS OF FACT.
The taxpayer is a Wisconsin corporation, with its office located at Hacine. It was organized in September, 1918, with authorized common stock of 1,500 shares of par value of $150,000, of which 200 shares were issued for organization expenses.
On September 30, 1918, the taxpayer acquired from Thos. L. Fewick, the inventor, patent application No. 220147 and issued therefor 400 shares of its common stock having a par value of $40,000. The patent was issued September 13, 1921. In October, 1919, the taxpayer's common stock to the amount of 600 shares was sold for $36,325 paid in cash and $10,850 paid by interest-bearing notes.
The State of Wisconsin normal income tax shown on the 1920 tax roll, assessed on the net income of the taxpayer for 1919, amounted to $126.84. The taxpayer paid a personal-property tax in Wisconsin during 1920 in an amount in excess of said assessment of $126.84, and the personal-property tax paid was credited against said assessment of income tax in accordance with the income-tax law of the State of Wisconsin.
DECISION.
The determination of the Commissioner is approved.