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*1296OPINION.

GReen :

Two witnesses testified as to the value of the properties at the time they were acquired by the corporation. One was the engineer who investigated the properties for Baruch Brothers. In his opinion the properties were worth from $550,000 to $750,000. The petitioner testified that they were worth $700,000 subject to an indebtedness of $100,000. Cross examination developed no weakness in the opinion of values thus expressed.

The starting point for the computation of gain resulting from the sale is the cost of the stock received by the petitioner in exchange for properties. The cost of this stock to the petitioner is the value of the properties exchanged therefor, having due regard for the *1297$100,000 cash paid. This sum may be treated either as reducing the value of the assets to get their net value, i. e., $500,000, or as cash received so that the assets of the value of $500,000 were exchanged for stock. Either treatment gives the same result. The petitioner parted with assets having a net value of $500,000 and came into possession of 260,000 shares of stock. The cost per share was $1,923.

The petitioner transferred 80,000 shares of the stock to Baruch Brothers in consideration of the release of his stock from the escrow agreement. The value of this consideration is susceptible of measurement in dollars. The transaction in itself gave rise to no income. The 80,000 shares of stock cost the petitioner $1,923 per share. This cost should be added to the cost of the remaining shares to find the total cost of the 180,000 shares. This total cost was $500,000, or a total cost per share of $2,778.

The Commissioner, in his computation of gain, used as the sale price the sum of $130,243.92. There is no evidence to indicate that this was not the true sales price. This gives a sale price of $2.8294 per share. The gain per share is ascertained by subtracting from this amount the total cost per share ($2,778). The gain per share multiplied by the number of shares sold gives the gain on the shares so sold.

Judgment will be entered after 15 days' notice, under Bule 50.

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