Appeal of Service Recorder Co.

*99OPINION.

Smith:

In its appeal the taxpayer alleges error on the part of the Commissioner in disallowing any amount for exhaustion of patents as a deduction from gross income in its tax return for 1919, and also in reducing its claimed invested capital for each of the years 1919 and 1920 by the total amount claimed as the cost to it of the patent license and intangibles.

With respect to the first allegation of error, the Board is of the opinion that the taxpayer is entitled to claim a deduction from the gross income reported in its returns for the year 1919 of an amount representing exhaustion of…