OPINION.
Giieen:
The taxpayer abandoned its allegation of error relating to the depreciation on equipment. It contends that the lease which it secured prior to March 1, 1913, had a value on March 1, 1913, of $100,000. It appears from the evidence, however, that the theatre was larger than necessary, that its size was subsequently reduced, and that for many years after March 1, 1913, the theatre was operated at a loss. One of the witnesses for the taxpayer testified that in his judgment a reasonable rental for the theatre would have been $30,000 a year, but he did not fix the year for which he thought such rental would be reasonable. There is no evidence which would warrant us in believing that this leasehold had any value whatever on March 1, 1913, and upon this point we must affirm the Commissioner.
As to the interest which the taxpayer claims the right to deduct, there is nothing in the evidence to indicate that the note was accepted by the Orpheum Theatre & Realty Co. in payment, and the indications are that the note was the conventional promise to pay in the future. The interest was not paid by the taxpayer during the year in question,- and, since it is on a cash receipts and disbursements basis, it may not deduct interest unless such interest was actually paid in the taxable year. There was no error on the part of the Commissioner.
Order of determination will be entered accordingly.