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*553OPINION.

Aettndell:

The Commissioner, in computing the taxable .gain from the sale, depreciated the tangible assets down to the date of sale and refused to allow any value for intangibles owned by the taxpayer, both on the theory that there were no intangible assets of value, and, further, that the sale did not purport to dispose of any intangibles, even if the taxpayer owned any of value. The taxpayer conceded the correctness of the Commissioner’s action in depreciating the tangible assets.

The taxpayer was the sole proprietor of the business of George S. Mepham & Co., which was engaged in the manufacture of dry color and pigments. The business was run on very conservative lines and the accounts were kept in the same conservative way. For a number of years prior to March 1, 1913, the taxpayer had successfully operated his business and had built up a good will of considerable value. The difficulty in the manufacture of his product came from the emission of sulphuric fumes, which caused trouble with his neighbors and the municipal authorities. He had, in the early days of his business, acquired certain American* rights to British patents, which he further developed and adapted to his needs, but the process so adapted was never patented. This secret process served to eliminate the fumes and thus permitted him to carry on his manufacturing while his competitors were in constant difficulties. This secret process was unknown to the trade and to the public at the time of the sale of his property to Williams. The testimony clearly establishes the fact that the taxpayer, in disposing of his business, sold not only ■ the tangible property used in the business, but also the good will and other intangible assets, including the secret process heretofore mentioned. We have found that the intangible assets were, on March 1, 1913, worth $67,965. This amount should be added to the value of the tangible assets as determined by the Commissioner, and the total figure thus obtained should be used in determining the profit, if any, on the sale of the taxpayer’s business to Williams in 1919.

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