OPINION.
Phillips:
The petition alleged two errors as the grounds of appeal, but the proof was confined to the deductions claimed for 1920 and 1921 on the Burroughs account. Burroughs, over a period of years, became indebted to the taxpayer in the net amount of $4,380.53 and, in order to extinguish this liability, deeded his orange grove to the taxpayer in 1921. The debtor had no other property from which the debt could be collected, and the taxpayer appears to have taken over the grove as a last resort, for such speculative value as it might have. This grove had a value not in excess of $2,625, against which there was a mortgage of $4,100.
Under the Revenue Act of 1921, where property is exchanged for other property having a readily realizable market value, there is a closed transaction from which profit or loss results. There are. certain exceptions laid down in the statute which have no application to this appeal. The testimony discloses that the readily realizable market value of the orange grove received by the taxpayer in exchange for the account receivable was less than the mortgage thereon. The equity in the property had no more than a nominal'or speculative value. The transaction having been closed in 1921 by means of this exchange, we must hold that the taxpayer sustained a loss in 1921 of $4,380.53.