Broadway Strand Theatre Co., 12 B. T. A. 1052, where a corporate form is resorted to for its business benefits, the burdens, if any, must also be assumed. See also Evelyn F. Gregory, 27 B. T. A. 223, and 112 West 59th Street Corp., 23 B. T. A. 767.

The Public Service Company is engaged in the business of distributing electric power for light, heat and other purposes; the business activities of the Power Company consist of owning, developing and leasing water power; the Realty Company is engaged in buying and selling real estate and investments; and the Paper Company is engaged in the business of making paper. The businesses carried on by these four companies in our opinion are not related trades or businesses. Cf. Crossett Western Co., 27 B. T. A. 258; Starr Piano Co., 26 B. T. A. 835; Herald News Co., 26 B. T. A. 688; Western Hide & Fur Co., 26 B. T. A. 354; Roessler & Hasslacher Chemical Co., 25 B. T. A. 915; Nowland Realty Co., 18 B. T. A.. 405.

Furthermore, even if the four corporations here involved were engaged in "related trades or businesses " and entitled to the benefit of section 240 (d), it is incumbent upon them to prove facts from which the Board can make an accurate distribution or apportionment. Starr Piano Co., supra; Herald News Co., supra; Western Hide & Fur Co., supra, Roessler & Hasslacher Chemical Co., supra; Broadway Strand Theater Co., supra.

We turn then to a consideration of the evidence in this proceeding. The consolidated return of the Paper Company, the Public Service Company and the Realty Company (respondent's Ex. F) and the separate return of the Power Company (respondent's Ex. E), both for the year 1923, are before us. The petitioners introduced in evidence the balance sheet and the profit and loss statement of the Realty Company (petitioners' Exs. 7 and 9) and the balance sheet of the Power Company (petitioners' Ex. 8). These statements were prepared by E. P. Sherry from the books of the respective companies. In such statements he allocated certain of the assets, liabilities, income and disbursements of the Realty Company and the Power Company, respectively, as "for the benefit" of the Paper Company. Although the totals on such statements agree with the books of account of the respective companies, such allocation does not appear in the books of account of such respective companies, but represents the opinion and judgment of E. P. Sherry, nor do the books of account of the Realty Company indicate or contain an account showing that the assets as allocated were held for the benefit of the Paper Company. On the profit and loss statement of the Realty Company it appears that 84 per cent of the "Milwaukee office expense," "General expenses" and "Interest paid " were allocated to the Paper Company. He arrived at this percentage by

determining the assets of the Realty Company which in his judgment were "held for the benefit " of the Paper Company, the book value of which assets on January 1, 1923, was 84 per cent of the total assets of the Realty Company. He testified that this ratio prevailed throughout 1923, approximately, so that, at the end of 1923, 81.6 per cent of the assets of the Realty Company "were held for the benefit " of the Paper Company and 18.4 per cent were not so held. These percentages were used in allocating such expenses. On such statement all of the railroad earnings during 1923 of $1,387.50, and a loss of $21,747.75 resulting from the abandonment of such railroad, were allocated to the Paper Company. Out of a total of $17,765, representing dividends on investments received by the Realty Company during 1923, the amount of $17,477 was allocated to the Paper Company. Nearly all of that amount represents dividends paid by the Paper Company on its preferred stock held by the Realty Company and a very small part thereof represents dividends paid by the Power Company on its preferred stock owned by the Realty Company.

On the balance sheet of the Power Company (petitioners' Ex. 8) Sherry allocated $288,555.37 out of the total assets of such company of $293,243.73 as of January 1, 1923, and $445,193.40 out of total assets of such company of $454,983.68 as of January 1, 1924, as held for the benefit of the Paper Company. The greater part of such amounts so allocated as held for the benefit of the Paper Company represents the cost of hydroelectric developments and the transmission line which were under lease to the Paper Company.

To the balance sheet of the Power Company (petitioners' Ex. 8) there is attached a statement showing that the Power Company on July 1, 1922, leased to the Paper Company for 25 years the so-called "Lower Power " and " Pixley Power" and the transmission line for an annual rental of $22,000, $24,400, and $1,200, respectively, the lessee to pay all real estate taxes and repairs. There is no evidence from which we can determine whether or not such rentals were fair or were not comparable to rentals paid for similar property by others. The only testimony in this regard is that such leases were very advantageous to the Paper Company. This is also true relative to the rent paid for the railroad.

Petitioners suggest on brief that a proper consolidation of the accounts would be to assign a percentage of the net income and net loss of the Realty Company and the Power Company to the Paper Company, but that they consider that the choice of actual methods may more properly be worked out under Rule 50.

In Roessler & Hasslacher Chemical Co., supra, the Board stated: Where some allocation is proper under section 240 (d) it is incumbent upon a petitioner before this Board to prove a more accurate method

of distribution or allocation than those suggested by this petitioner or at least to show sufficient justification for failure to do so. Even if every other question in this case were decided in the petitioner's favor, nevertheless, we could not make any allocation. We need decide nothing more.

In our opinion the petitioners have failed to prove a reasonably accurate method of distribution or allocation, nor have they proved sufficient facts to enable the Board to make a proper or reasonably accurate distribution or allocation. As, in our opinion, the petitioners, the Realty Company and the Power Company are not entitled to consolidation of accounts under section 240 (d), supra, it is unnecessary to decide the questions raised by the respondent that section 240 (d) applies only to corporations entitled to the benefits of section 262 of the Revenue Act of 1921, and that permitting the consolidation of accounts under section 240 (d) is within the sole discretion of the respondent. Roessler & Hasslacher Chemical Co., supra.

The determination of the Commissioner is approved in all respects except as to disallowance of a deduction in the amount of $16,509.80, representing the excess of net loss sustained by the Flambeau Paper Company in the year 1921 over the amount of such net loss applied to the taxable year 1922, as to which the Commissioner confessed error.

Reviewed by the Board.

As to petitioner Flambeau Public Service Company judgment will be entered for the respondent. As to petitioner Flambeau Paper Company judgment will be entered under Rule 50.

JULIUS GLASER AND AARON WALDHEIM, EXECUTORS OF THE ESTATE OF DAVID SOMMERS, Deceased, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket No. 38381. Promulgated December 14, 1932.

1. In 1916 decedent made a will bequeathing $35,000 to a childrens' home. Later he stated frequently to friends his desire and intention of changing the will and enlarging the bequest, but he died without so doing. Held, there was no valid bequest in excess of $35,000.

2. In 1923 decedent agreed with a federation of charities that he would assume all the running expenses of the childrens' home in lieu of his annual subscription to the work of the federation. That arrangement continued for several years until decedent's death. In 1924 and 1925 decedent frequently told friends that he would provide adequately for the expenses of the home after

his death, but he did not do so. Held, neither the federation of
charities nor the home thereby acquired a claim against decedent's
estate under section 303 (a) (1) of the Revenue Act of 1924.

3. In 1923 decedent secured a new matron for the childrens'
home. In order to induce her to take the position he promised her
that he would take care of all the running expenses of the home
while he lived, and after his death as well. He died without ade-
quately providing for such expenses after his death. Held, neither
the matron nor the home thereby acquired any claim against de-
cedent's estate for a fund for the home, under section 303 (a) (1)
of the Revenue Act of 1924.

4. Petitioners held entitled to a deduction of $21,014.49 with respect to income taxes for years prior to decedent's death.

Stanley S. Waite, Esq., for the petitioners.

C. H. Curl, Esq., for the respondent.

This proceeding is for the redetermination of a deficiency in estate tax asserted by the respondent in the amount of $15,645.36. The errors alleged are (1) failure to allow as a deduction $215,000 paid to a charitable institution and claimed to have been an indebtedness of the estate; (2) failure to allow as deductions $2,210.80 and $22,320.59, which amounts were asserted by respondent as deficiencies in decedent's income taxes for the years 1924 and 1925, respectively; (3) including in the gross estate $45,000 and $8,845, which amounts represent the value of certain real estate owned by decedent at the time of his death, and which was located in Missouri and Florida, respectively. At the hearing respondent conceded that the amount of $45,000 should be excluded. Petitioners now concede that the amount of $8,845 was properly included.

FINDINGS OF FACT.

David Sommers was a resident of St. Louis, Missouri. He was interested in, and contributed to the support of the Jewish Federation, which is an association of all the Jewish charities of St. Louis, including an incorporated institution, a Shelter Home for children. In 1916 the wife and two young daughters of David Sommers were killed in an accident. Soon after their death, and at Sommers' request, the name of the Shelter Home was changed to The Dorothy Drey Sommers Shelter Home, in memory of his older daughter. On July 22, 1916, David Sommers made a will, article 2 of which provided a bequest of $35,000 to the Shelter Home. At that time Sommers was a man of comparatively small means, but by 1924 his wealth had largely increased. His contributions to the Jewish Federation for some time prior to 1924 had been $5,000 per year.

At a mass meeting in behalf of the Jewish Federation held in 1923, David Sommers promised that he would assume all the expenses of

the Shelter Home in lieu of his usual annual subscription of $5,000 to the work of the Jewish Federation. The expenses of the Shelter Home were approximately $10,000 per year. Sommers' proposition was accepted, his subscription to the Federation canceled, and the Shelter Home was thereafter omitted from the budget of the Federation. Thereafter, Sommers made several statements to his friends and relatives, and to directors of the Federation, that he would support the Shelter Home and would provide for its support after his death. In 1923 he was president of the Shelter Home. He secured a new matron for it, and, to induce her to give up the position she then held, Sommers promised her that he would take care of the Shelter Home financially while he lived and after his death as well. In 1925 Sommers told his attorney that he wished to change his will and to leave $250,000 or more to the Shelter Home. That was never done, however, and Sommers died suddenly in December, 1925. After his death there was found in an envelope containing his will of July 22, 1916, a memorandum in David Sommers' handwriting, but not dated or signed, which contained the following: "Article 2. Change to $250,000.00 $50,000 for a building balance. The income on this 50 m to be reinvested and not spent. $200,000 a trust fund to furnish permanent income."

On June 17, 1926, the probate court in St. Louis, acting upon a petition filed by the executors of David Sommers' will and upon written request of all the "sisters and brothers of the deceased who are the only ones interested in the estate," found that it was the intention of the deceased to leave $250,000 to The Dorothy Drey Sommers Shelter Home and authorized David Sommers' executors to pay that amount to the proper officers of the home, which was done. Respondent has allowed $35,000 of that amount and has disallowed the balance as a deduction from the amount of the gross estate.

On October 10, 1929, respondent mailed a deficiency notice to the executors of David Sommers' estate asserting deficiencies in income. tax against David Sommers for the years 1924 and 1925 in the amounts of $2,210.80 and $22,320.59, respectively. The executors have since then paid to respondent the sums of $2,210.80 and $18,803.69, with accrued interest on both amounts, to cover the deficiencies for 1924 and 1925. It has been stipulated that petitioners are entitled to a deduction from the gross estate in the amount of $21.014.49.

At the time of his death David Sommers owned real esate situated in Missouri of the value of $45,000. He also owned real estate sitnated in Florida of the value of $8,845. Respondent has included both amounts as part of the gross estate of the decedent for Federal

estate tax purposes.