The opinion
*212 OPINION.
Lansdon:
The petitioner’s claim that the amount of unpaid subscription notes should be included in its invested capital for each of the taxable years is amply supported by the record.-
Each of the subscribers for stock was solvent. A banker in business at Sheridan testified that the notes were worth their face value. *213 This evidence is corroborated by the fact that all such notes were paid long before the hearing of this proceeding. We are of the opinion that the amounts of the unpaid stock subscription notes, which were negotiable paper, should be included in the petitioner’s invested capital as claimed. Appeal of Hewitt Rubber Co., 1B. T. A. 424; Appeal of Cross Mountain Coal Co., 2 B. T. A. 587; Appeal of American Steel Co., 1 B. T. A. 839.
The evidence is conclusive that the Livingston Meat Co. was insolvent and out of business in the year 1921, and that it had no assets available either for the payment of its current liabilities or for distribution as liquidating dividends, except as set forth in our findings of fact. The stock of such company', acquired by the petitioner at a cost of $2,000, was worthless at July 31, 1921, and its cost is a proper deduction from the gross income of the petitioner as a loss sustained in the taxable year.
Under the Revenue Act of 1921, and the regulations pertaining thereto, a debt may be charged off to the extent that it is determined to be worthless. The petitioner owned the $2,300 promissory note of the Livingston Meat Co. Its only hope of collecting any part thereof was from the proceeds of the accounts receivable of such defunct company. It thought it might realize $500 from such accounts and so charged off the note, less that amount. The amount of $1,800 should be deducted from the petitioner’s gross income for the fiscal year ended July 31,1921, as a debt ascertained to be worthless and charged off in such year.
Reviewed by the Board.
Judgment will be entered for the petitioner.