The opinion
HICKENLOOPER, Circuit Judge
(dissenting) . I cannot concur. Under the provisions of article 39 of Regulations 45, the determinative issue does not seem to me to be so much whether the 70,000 share bonus formed part of the incentive of Collin to make the purchase and therefore part of the consideration received, as an issue of fact, viz. whether the purchase price could “be fairly apportioned between the stock and securities purchased.” Obviously this means, with fairness to both the government and the taxpayer, not necessarily a mathematically exact apportionment, and a solution of the question depends upon a multiplicity of evidential facts sueh as the nature of the securities purchased, market and book values at the time, the purposes for which the securities were purchased, whether the parties themselves dealt with direct reference to a unit price, or a gross price for an unappor-tionable whole, whether in a practical sense, as well as a highly theoretical sense, the profits are to be considered as properly allocated to any specific year, and like considerations.
Each and all of these evidential aids to a solution of the issue seem to point to the propriety of the apportionment made by the Board of Tax Appeals. The common stock, forming the bonus, had neither book nor market value at the time. Collin bought 6,-500 units, each consisting of one share of preferred and two shares of common, with a pure bonus of 70,000 shares of common. The units were bought for resale. The 70,-000 shares were acquired to be retained for *755 purposes of company control and increment in value as yet wholly speculative. He intended two distinct and separate types of profit, one from the sale of the units, the other from the retention of the bonus. They should be treated separately.1 The parties themselves seem to have dealt upon a unit price basis of $80 per unit plus some incidental expenses. The 70,000 common share bonus was considered as the promoter’s margin, or,"in their vernacular, as “velvet.” In a practical and very proper sense, the profits ultimately realized upon resale of units in 1918 were profits realized in that year. Whether they should be so considered should be determined, if possible, by considering the situation as of that time, and without regard to changes in rate of tax, variation in net income of the taxpayer for the several years, and the like. The utmost that the taxpayer should be permitted to claim is that the profits be not unreasonably (and therefore unfairly) augmented by arbitrarily fixing the cost price too low. Here, attributing the entire cost to the 6,500 units raised such cost to approximately $80 per unit, to the benefit rather than the prejudice of Collin. If apportionment were fairly possible, the apportionment was as fair to Collin as he could ask.
Furthermore, the determination of the possibility or practicability of fair apportionment seems to call distinctly for the exercise of a sound discretion and judicial power on the part of the board. The claim that apportionment is not fairly possible is in the nature of a claim for exemption, at least for the then current year. To be sustained, this claim must be made out by clear and convincing proofs. Any doubt upon the question is fatal to the claim. Wilmington & Weldon R. Co. v. Alsbrook, 146 U. S. 279, 294 , 13 S. Ct. 72 ( 36 L. Ed. 972 ); Bank of Commerce v. Tennessee, 163 U. S. 134 , 146, 16 S. Ct. 456 ( 40 L. Ed. 645 ); Yazoo, etc., R. Co. v. Adams, 180 U. S. 1, 22 , 21 S. Ct. 240 ( 45 L. Ed. 395 ). Collin has offered no proof of this quality that the apportionment was either impossible or impracticable. Ho has contented himself with saying it could not be made. At most, it seems to me doubtful that the apportionment made was either unfair, impracticable, or unreasonable. This court should not, in my opinion, interfere in the exercise of discretionary powers of the board nor reverse the findings in this case upon this question of fact — the fact, of possible fair apportionment — in the face of substantial evidence that the apportionment was both possible and fair.