Considered by MARQUETTE, MILLIKEN, and PHILLIPS.  WESTERN ZING OXIDE CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Western Zinc Oxide Co. v. CommissionerDocket No. 8604.United States Board of Tax Appeals7 B.T.A. 972; 1927 BTA LEXIS 3051; August 2, 1927, Promulgated 1927 BTA LEXIS 3051">*3051 C. J. Walker, Esq., for the petitioner.  A. G. Bouchard, Esq., for the respondent.  VAN FOSSAN 7 B.T.A. 972">*972  This is a proceeding for the redetermination of a deficiency of $9,997.26, in income and profits taxes for the calendar year 1918.  The questions involved are (1) the value for invested capital purposes of a zinc oxide plant paid in for stock at the time of incorporation in 1915; (2) the value of certain mining property paid in to the corporation for stock in 1918; (3) the cost of tangible assets for depreciation purposes.  FINDINGS OF FACT.  Petitioner is a Colorado corporation with principal offices at Leadville, Colo., and was incorporated in the year 1915.  Upon incorporation it acquired a zinc oxide plant from J. B. McDonald, a Mr. Burton, John Eberville, Alf Hoffman and A. B. Augustine in consideration of the issue to them of $23,000 of its capital stock.  On petitioner's books the transfer of the stock and the transfer of the plant were each set up as a cash transaction in the amount named.  The plant was constructed in 1914 by the Western Zinc Mining & Reducing Co., which contracted to purchase from McDonald and Burton 1,500 tons of zinc1927 BTA LEXIS 3051">*3052  ore per month.  Because of financial difficulties the Western Zinc Mining & Reducing Co., after a few months' 7 B.T.A. 972">*973  operation, closed the plant and offered it for sale to Augustine for $40,000 cash.  Augustine, with whom McDonald, Burton, Eberville.  and Hoffman were associated in negotiations for the purchase of the plant, rejected this offer.  After further negotiations the plant was offered to Augustine and his associates in consideration of $23,000 cash and the cancellation of the McDonald-Burton ore contract.  This offer was accepted by the purchasers, the McDonald-Burton contract was canceled and the plant transferred to the above named individuals.  Subsequently, in 1915, the above individuals transferred the plant to petitioner.  In the year 1918 petitioner acquired certain property in fee, known as the Kennebec Mine, and leases on certain other property, known as the Yak, for which it paid $250,000 par value of its capital stock.  The actual cash value of the property acquired in 1918, known as the Kennebec Mine and the Yak leases, was $25,000.  OPINION.  VAN FOSSAN: The evidence fails to establish a cash value of the original plant in excess of $23,000, the1927 BTA LEXIS 3051">*3053  amount of stock issued therefor.  This figure also properly represents the cost of the original plant for depreciation purposes.  There was some evidence of additional plant investment during 1915-1918 but the testimony as to the cost of same and the dates thereof was so indefinite as to make it impossible for us to determine, with any accuracy, a proper amount in excess of the figure of $23,000 as a basis for depreciation or to fix a rate of depreciation therefor.  Judgment will be entered on 15 days' notice, under Rule 50.Considered by MARQUETTE, MILLIKEN, and PHILLIPS.  