Gersten v. Commissioner

OPINION.

TURNER, Judge:

The first issue raised in the proceedings is whether the payments which the 4 corporations, Richard, Whittier, Rex, and Lawrence, made to San Gabriel were properly included by such corporations in computing the cost of the houses which they constructed and sold. The respondent determined that the amounts paid to San Gabriel were not properly includible by the corporations in computing their cost of goods sold because all such payments were repayable. Petitioners, on the other hand, argue that the liability of each of the corporations to pay for the installation of the…