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(1948) . The Court of Appeals for the Eighth Circuit held with the Commissioner on all issues. 175 F. 2d 305 (1949) . We granted certiorari, 338 U. S. 909 (1950), in view of an asserted conflict between the decision below and that of the Court of Appeals for the Third Circuit in Commissioner v. McKay Products Corp., 178 F. 2d 639 (1949), reversing the Tax Court, 9 T. C. 1082 (1947). Two questions must be determined: First, whether petitioner in computing its normal-tax net income, which is adjusted in determining excess profits net income, is entitled to deductions for depreciation with respect to property transferred to it from community groups or ac­quired with cash to the extent received from such groups. Petitioner contends that the properties so acquired were depreciable as “gifts” under § 113 (a) (2) of the Internal Revenue Code or as “contributions to capital” under § 113 (a) (8) (B) or both; as to the properties acquired with cash it contends alternatively that they had “cost” to the taxpayer under § 113 (a).2 Second, we must de­cide whether in computing petitioner’s invested capital credit the aggregate value of the assets transferred by the community groups may be included in equity invested 2 Section 23 (1) of the Code permits a deduction from gross income for depreciation of property, and § 23 (n) provides for depreciation shall be as provided in § 114, w htihcaht athdeo p“tbsa stihse” s“uabdsjeucsttieodn bians itsu”r np rroevfeirdse dt oi n§ 1§1 31 1(3a )( bw) hifocrh dpertoevrimdiensi tnhga tg atihne. “bTahsiiss t(iuonnasd ijnucsltueddi)n”g sthhael l fboell otwhien “g:c os§t 1” 1o3f (tah)e (p2r)o pperrotvyi,d weist ihn creerlteaviann et xpcaerpt­tthhaet b“asIifs tshhea lplr obpee rtthey swaamse a caqs uiitr ewdo ublyd gbieft ianf ttehre Dheacnedsm boefr t 3h1e, d1o9n2o0r, or the last preceding owner by whom it was not acquired by qgiufitr ed after De§ c1e1m3b (ear) 3(18,) 19p2r0o,v ibdye sa ctohrapto r“aItfi otnh e. p.<r.o p(eBr)t ya sw paasi d-aci-ni surplus or as a contribution to capital, then the basis shall be the same as it would be in the hands of the transferor 2 BROWN SHOE CO. v. COMMISSIONER.