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*1247OPINION.

Phillips:

There is not sufficient evidence from which we may determine a March 1, 1913, value of the stock different from that determined by the Commissioner. The determination made by him is based upon the capital and surplus of the corporation as shown by its books and includes no allowance for good will. The petitioner testified from memory that the earnings for the years from 1909 to 1912 were approximately $88,000. Since it appears that no dividends were paid and that the surplus of the corporation in 1913 was only $56,000, we are not inclined to attach much importance to the statement made with reference to the approximate earnings in the absence of any explanation of the discrepancy between the proper earnings and the surplus. Furthermore, there is nothing in the record from which we may determine whether an adequate salary for the service rendered by the petitioner to the corporation in those years was deducted in determining the earnings. The record would indicate that it was doubtful whether such was the case. On the record the action of the Commissioner must be approved.

It is the contention of the petitioner that the stock of the new company had no fair value and can not be included in the computation of the income. The evidence discloses that $450,000 of the $600,000 par value of the stock of the new corporation was sold. It is urged that because the syndicate was unable to secure subscriptions for the remainder, it had no fair market value. The petitioner had his choice of either accepting this stock or demanding cash, under the option granted, in which latter event the sale probably would not have been carried out. The other stockholders were all to receive cash. He accepted the sto*ck in lieu of the cash. In view of all the surrounding circumstances, we are of the opinion that no error was made in treating this stock as worth its par value.

The petitioner further alleges that the former Commissioner of Internal Revenue had decided that such stock had no fair market value and that any profit on the transaction should be taxed when disposition was made of the stock. The record, however, fails to *1248show that any former Commissioner has passed upon the question. Apparently, the petitioner relies upon a certificate of overassessment issued in the latter part of 1922 at which time the present Commissioner was in office. The record does not present the question whether one Commissioner may overrule the determination of his predecessor on a question of fact.

It is the petitioner’s contention, raised for the first time in an amended petition filed with this Board, that the proceeds from only 32 shares of the capital stock of the Ylchek Tool Co. were his property at the time of the dissolution of that company or the sale of its stock and that the remaining 3,000 shares had previously been given to his children. The record is conflicting and it is difficult to know what is the truth. There is no doubt that such stock was transferred to the children on the books of the corporation and that they voted it at a meeting of the corporation which authorized the sale of the assets to the new corporation. There is no doubt that the petitioner had delivered the stock to his children and that the proceeds finally found their way into the hands of the children except to the extent that their mother received an equal interest with them. All such facts indicate a bona fide gift of the stock to the children.

The fact that the father thereafter handled the receipt of the proceeds and attempted to keep it intact for the children is entirely consistent with the contention that they were the owners. The action of the father was no more than natural, considering the age of the children and their lack of business experience. On the other hand, it appears that prior to the time when the transfer was made to the children the matter of forming a family corporation to hold the proceeds was discussed and it was agreed that the proceeds should be placed in such a corporation. It would seem that all the details for the sale had already been arranged. Nothing remained to be attended to except to receive the proceeds. In such circumstances there may be a very grave question whether the petitioner transferred and delivered the stock to his children with the intention that they should have such stock, or under an agreement that the proceeds of the sale should be theirs to be invested in a family corporation under the control of the petitioner. A gift involves more than a delivery of the property. 'There must be the present intention that the property so delivered shall be the property of the cfonee. Ordinarily delivery implies such an intention but such is not the case here because it appears that the intention was not that the stock should belong to the children but that the proceeds should go to an investment corporation of which they should be the owners. The stock appears to have been delivered with the understanding that such should be the case. There are further facts which confirm this belief. In the original return *1249filed by tbe petitioner and in affidavits furnished to the Commissioner of Internal Revenue which were produced on cross-examination of the petitioner, statements were made that he was the owner of all of this stock. In the original petition filed before the Board no claim was filed that he was not the owner and it was not until an amended petition was filed herein that it was claimed that any gift of the stock had been made to the children. The person who had handled petitioner’s tax matters before the Commissioner, called to the stand as a witness, testified that the 1911 return had been prepared, by another accountant who had included the proceeds as income to the petitioner; that during the investigation and controversy with the Unit he had found the record showed that the proceeds had been considered as having been received and taxable to the petitioner and that it was not until the latter part of 1924, in examining the minute books and old stock records for other information that he had found the records showing the gift of the stock to the children prior to the date of the sale and that upon questioning the petitioner about such transaction the petitioner had stated that the transfer to the children was not made to avoid any tax and that on the advice of counsel petitioner had always included it in his tax returns.

Considering the entire record we are of the opinion that the transfer and delivery of the stock to the children prior to its sale was not for the purpose of vesting ownership of such stock in them and did not do so and that the petitioner is taxable upon any income which results by reason of the ownership of such stock.

Decision will he entered for the respondent.

Considered by Marquette and Van Fossan.Milliken not participating.

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