Schuessler v. Commissioner
United States Tax Court
In 1946, petitioner E. W. Schuessler sold gas furnaces. Included in the purchase price of furnaces was a fee for his guarantee to turn on and cut off such furnaces for the next 5 years. He set up a reserve on his books to cover the cost of such service for the 5-year period. He kept his books and reported his income on the accrual basis. Held, the reserve for servicing the furnaces was not a proper deduction in computing income for 1946.
1Opinion of the Court
OPINION.
Rice, Judge:
Petitioner argues on brief that the method used in computing the amount of the reserve shown on his return was erroneous, and that the proper method would be to compute the cost of servicing the furnaces on the basis of $2 per call for a total of 10 calls for each furnace. He argues that this is a fixed and definite liability and that the amount of the reserve should, therefore, equal $20 multiplied by the number of furnaces sold, which would amount to approximately $13,000. This is the same amount he used on his return but reached by a different method. We think it is…
2Cases cited4 opinions
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- United States v. LewisSupreme Court of the United States · 1951
- Beacon Publishing Company, a Kansas Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1955
- Your Health Club, Inc. v. CommissionerUnited States Tax Court · 1944
3Cited by28 opinions
- Automobile Club of New York, Inc. v. CommissionerUnited States Tax Court · 1959
- Mooney Aircraft, Inc. v. United StatesCourt of Appeals for the Fifth Circuit · 1970
- Fifth Ave. Coach Lines,Inc. v. CommissionerUnited States Tax Court · 1959
- Simplified Tax Records, Inc. v. CommissionerUnited States Tax Court · 1963
- Potter v. CommissionerUnited States Tax Court · 1965
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