¶1These are appeals from deficiencies determined by the Commissioner in income taxes for the year 1919, in the amounts, respectively, of $766.57 as to W. C. Schroth, and $784.20, plus a penalty of $196.05, as to John G. Schroth. The facts in the two appeals are identical and they were heard together. At the hearing the taxpayers did not appear in person but by letter asked for a hearing at or near Sacramento, Calif. It appearing that there was no substantial issue of fact raised, the motion was denied and the appeals were taken under submission upon the pleadings.
¶2findings oe fact.
¶3The taxpayers are individuals residing in California.
¶4On November 3,1913, and April 1,1914, each of the said taxpayers purchased a total of 125 shares of the capital stock of the Phoenix *170Milling Co. for cash, the total purchase price paid by each being $12,500. In 1919 the Phoenix Milling Co. disposed of certain of’ its assets and distributed to its stockholders $205.20 per share upon its stock. The remaining assets of a book value of $160,676.40 were transferred to a reincorporated company of the same name and stock was issued to the stockholders of the old company of a par value of $160,000 covering such assets. The taxpayers in this appeal received for each share of stock in the old company held by them stock in the new of a relative proportion of $71.41 per share.
¶5The Commissioner determined that the taxpayers realized profits upon the above transactions of the difference between $100 per share-of the stock acquired by them and $276.61, representing the total cash and stock received from the sale of assets and reincorporation of the company, making the net profit $176.61 per share.
¶6DECISION.
¶7The determinations of the Commissioner are approved.