The opinion
*856 OPINION.
ARundbll :
We have held that contingent reserves may not be deducted from income under the several revenue acts. Consolidated Asphalt Co., 1 B. T. A. 79; Uvalde Co., 1 B. T. A. 932; Pan-American Hide Co., 1 B. T. A. 1249; M. I. Stewart & Co., 2 B. T. A. 737; Crescent Cotton Co., 5 B. T. A. 850.
Before an employee became entitled to a bonus he must have remained in petitioner’s employ for at least one year and must moreover have sold a certain amount of merchandise. On December 31, 1921, none of the employees for whom the reserve of $40,000 was established had been in petitioner’s employ for one year and no evidence was introduced as to the volume of their sales, or indeed what amount of merchandise they must sell to entitle them to a bonus. Petitioner’s liability being purely contingent, the deduction was properly disallowed.
Judgment will be entered for the respondent.
Considered by Lansdon and Green.