¶1dissenting: I dissent from so much of the opinion of the Board in this proceeding as holds that the petitioner is entitled to deduct from gross income $2,798.24 claimed as interest paid on his behalf by the Sterling Discount Corporation and $4,017.68 representing taxes paid on his behalf by the same corporation.
¶2In his return the petitioner claimed no loss deduction in respect of the transaction whereby he sold the Houston Street property to the Sterling Discount Corporation, nor did he claim the deduction *1330for the interest and taxes which the vendee assumed as a part of the purchase price. In his petition to the Board he claims the deduction of the interest and taxes, alleging that:
(a) On or about July 21, 1934, I sold improved real estate in the City of Atlanta to the Sterling Discount Corporation, in which I owned more than 50% of the outstanding capital stock. I sustained a loss on this sale which is not allowable under Section 24 (a) 6 of the Revenue Act of 1934. A profit on this sale would have been subject to income tax. Ad valorem taxes were paid on this property during 1934 in the amount of $4,017.68. Interest was paid in 1934 on mortgage secured by this property in the amount of $2,798.24. These payments were made by checks of the Sterling Discount Corporation which I signed as President. Under the decisions, these payments were a part of the purchase price paid by Sterling Discount Corporation for the property sold to them by me. By the same token, these payments of interest and taxes were made with my money and in my behalf and as such are deductible by me when paid as my income tax returns are made on a cash basis.
¶3The parties have stipulated:
… that the loss to the Petitioner on the sale of the property in question was based upon a sales price to Petitioner, which sales price included the amount of interest and taxes paid by the purchaser.
¶4The taxpayer’s return was made upon the cash receipts and disbursements basis. The interest and taxes claimed as deductions may not be allowed unless those payments were made by the petitioner during the taxable year.
¶5The stipulated facts are that the payments in question were made by the Sterling Discount Corporation. They were made as a part of the purchase price of the property. They constitute an investment of capital by the corporation. They constitute a part of the cost of the property to the corporation. In the case of Lifson v. Commissioner (C. C. A., 8th Cir.), 98 Fed. (2d) 508; certiorari denied, 305 U. S. 662; rehearing denied, 306 U. S. 618, the court said:
When one purchases land which is subject to a lien for taxes, the subsequent payment of those taxes by the purchaser does not constitute an allowable deduction from gross income, for the reason that the taxes accrued while the land was in other ownership and the payment of them is merely a payment of a part of the cost of acquiring the property. Merchants Bank Bldg. Co. v. Helvering, 8 Cir., 84 F. 2d 478, 481; Helvering v. Missouri State Life Ins. Co., 8 Cir., 78 F. 2d 778, 781; …
¶6When the corporation sells the property the gain will be the excess of the sale price over the cost basis, which includes the payments of the interest and taxes in question; and the loss will be the excess of that basis over the amount received by the corporation.
¶7The opinion of the Board holds that the corporation paid the taxes as agent for the petitioner. This is an assumption contrary to fact as shown by the stipulated facts and by the claim made relative thereto by the petitioner.
¶8*1331It seems clear that if the petitioner may deduct the interest and taxes in question there will be a double deduction; for clearly the corporation will be entitled to the deduction in the computation of its gain or loss upon the sale or other disposition of the property. This is the contention made by the respondent. In my opinion it is correct.
¶9The net result of the Board’s decision is to give the petitioner the deduction of a loss in respect of the transaction where such loss is contrary to the provisions of section 24 (a) (6) of the statute.