The opinion
Morris :
This is a proceeding for the redetermination of deficiency in income tax for the calendar year 1921 of $972.76.
findings of fact.
The petitoner is a Virginia corporation, a holding company with two affiliated subsidiary companies, namely, the Carolina & Worth-eastern Railroad Co. and the Albemarle Steam Navigation Co., with principal office at Suffolk. The Carolina & Northeastern Railroad Co. was operated under Federal control during the period from January 1, 1918, to March 1, 1920. It had no contract with the Director General of Railroads. During the year 1921 the Carolina & Northeastern Railroad Co. received $15,000 from the United States Railroad Administration as compensation for the period of Federal control. The company allocated the amount received as income accrued during the period from January 1, 1918, to March 1, 1920, and reported none of the amount as income for the year 1921 upon the amended consolidated return which was filed for that year, and showed a net loss of $3,272.41. The books of the petitioner and its subsidiary companies during the years 1918 to 1921, inclusive, were kept on the accrual basis and the income-tax returns were filed on that basis.
The Commissioner added to the consolidated income for the year 1921 the amount of $15,000 received from the Railroad Administration and determined the consolidated net income to be $11,727.59.
Judgment will be entered for the petitioner on 10 days notice, under Rule 50. Appeal of Illinois Terminal, Co., 5 B. T. A. 15, and Appeal of Cincinnati, Findlay & Ft. Wayne Ry. Co., 5 B. T. A. 108.