Alexander v. Commissioner
United States Tax Court
1. Petitioner was engaged in the cattle business as a "cattle feeder"; he purchased calves and yearlings which he fed for 9 to 18 months and he then sold as beef cattle. He regularly kept his books and reported his income on a cash basis. Under his method of accounting, he consistently charged off and deducted as an operating expense, the cost of cattle in the year of purchase. He did not defer deduction of the cost of cattle until the year of sale.
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1. Petitioner was engaged in the cattle business as a "cattle feeder"; he purchased calves and yearlings which he fed for 9 to 18 months and he then sold as beef cattle. He regularly kept his books and reported his income on a cash basis. Under his method of accounting, he consistently charged off and deducted as an operating expense, the cost of cattle in the year of purchase. He did not defer deduction of the cost of cattle until the year of sale. Held, that although the petitioner is on a cash basis, he is required, nevertheless, by Regulations 111, section 29.22(a)-7 to defer deduction of…
1Opinion of the Court
OPINION.
Hakron, Judge:
The chief question is whether the petitioner, who is on a cash basis, is entitled to deduct the cost of feeder cattle in the year of purchase, as he contends, or whether the deduction of such cost must be deferred until the year in which the cattle are sold, as respondent determined.
The respondent contends that the petitioner’s practice of deducting the cost of cattle as an operating expense in the year of purchase without regard to when the cattle are sold distorts income. He argues that although the petitioner is on a cash basis, petitioner is required, nevertheless,…
2Cases cited8 opinions
- Commissioner v. South Texas Lumber Co.Supreme Court of the United States · 1948
- Morrissey v. CommissionerSupreme Court of the United States · 1935
- Helvering v. R. J. Reynolds Tobacco Co.Supreme Court of the United States · 1939
- Lykes v. United StatesSupreme Court of the United States · 1952
- Caldwell v. Commissioner of Internal Revenue. Commissioner of Internal Revenue v. CaldwellCourt of Appeals for the Second Circuit · 1953
3 more not listed; retrieve them via the Exa API.
3Cited by24 opinions
- Fruehauf Trailer Co. v. CommissionerUnited States Tax Court · 1964
- Dearborn Gage Co. v. CommissionerUnited States Tax Court · 1967
- Stokes v. CommissionerUnited States Tax Court · 1954
- Romine v. Comm'rUnited States Tax Court · 1956
- Thompson v. CommissionerUnited States Tax Court · 1962
19 more not listed; retrieve them via the Exa API.