¶2The petitioner has failed to produce evidence to show that he is entitled to a deduction of any amount under section 214(a) (1) of the Revenue Act of 1918.
¶3There was evidence to show that the sale of the interest in the lease took place in 1919, instead of in 1920, as shown in the return; that the notes received had no market value in 1919; but that in 1920, the petitioner exchanged them for $30,000 in checks, which he then sold for $27,000 in cash or its equivalent.
¶4When property is exchanged for notes of a third party, income is realized in the year in which the transaction takes place to the extent that the fair market value of the notes exceeds the cost of the property, where that property was acquired subsequent: to March 1, 1913. Appeal of Aaron W. Wolfson, 1 B. T. A. 538; Appeal of E. Alice James, 1 B. T. A. 548.
¶5We are not concerned with the petitioner’s income for the year 1919, and we do not know whether or not it was correctly determined. There is nothing to indicate that the Commissioner has not excluded the items indicated on Schedule D of the 1920 return in his calculation of income for that year. The deficiency letter for 1920 is not before us and we do not know just how the deficiency was determined, but there is no satisfactory evidence to show that it was not correctly calculated upon income received from the sale of notes in 1920 at a price which was greater than their fair market value in 1919.
¶6Judgment will be entered after 15 days’ notice, under Bule 50.