imposed, and applies to bay rum imported from Porto
Rico. Bornn, 425.
XIII. Losses in the year 1919, due to the sale of all of plaintiff's
property used in the operation of its business, do not
result from operation, and are not the net losses refer-
red to in section 204 of the revenue act of 1918 as de-
ductible from the income-tax return for the preceding
year. Auburn & Alton Coal Co., 438.
XIV. Where plaintiff's property is sold for failure to pay ad-
ditional income taxes assessed and penalties imposed
for alleged fraudulent returns, and plaintiff produces
satisfactory evidence to show said returns were honest
and complete, it may recover. Garnet I. McMahon, Inc.,
559.
XV. Where distilled spirits in a bonded warehouse are acci-
dentally destroyed by fire after payment by the owner
of the internal-revenue stamp tax and before the stamps
are affixed to the packages for which issued, the said
stamps are not redeemable and the owner can not re-
cover the value of them. Kessler & Co., 723.
XVI. Where a testator devises and bequeaths his residuary
estate to trustees to form a corporation for charitable
purposes, the income therefrom for the period of the for-
mation of said corporation to be paid to a nephew of said
testator by the trustees, the income received by the
nephew during the year in which the trust was being
formed was subject to the Federal estate transfer tax.
Central Union Trust Co. et al., 828.
XVII. Where a partnership in 1918 makes return of its excess-
profits tax for the year 1917 on an accrual basis, and
during the year 1917 withdraws certain amounts from
its invested capital, the Commissioner of Internal Reve-
nue is authorized, for the purpose of computing the tax,
to reduce the invested capital shown in said return for
1917 by deducting, as of the dates of withdrawal, that
part of the excess-profits tax for the taxable year esti-
mated to have accrued at that date, although such tax
was not assessed and did not become due and payable
until a year after the withdrawal. D'Olier et al., 895.
XVIII. Where cigarettes for export are made from the "clippings
of tobacco leaf on which an import duty has been paid
on weight basis, the allowance by the Treasury Depart-
ment of drawback on the cigarettes exported "on the
basis of relative values at point of separation; that
is, the values of the wrappers and scrap or residue,"