O'Sullivan Rubber Co. v. Commissioner
United States Board of Tax Appeals
1. ACCRUAL. - An item need not be accrued as income for a year if at the end of the year there is no reasonable anticipation of its receipt when due. 2. PERSONAL HOLDING COMPANY - ANY CORPORATION. - A dissolved corporation continued under the laws to wind up its affairs is, during the period of liquidation, a corporation within the meaning of section 351 of the Revenue Act of 1934. 3. Id. - INTEREST. - Interest on purchase money notes is interest within the meaning of that…
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1. ACCRUAL. - An item need not be accrued as income for a year if at the end of the year there is no reasonable anticipation of its receipt when due. 2. PERSONAL HOLDING COMPANY - ANY CORPORATION. - A dissolved corporation continued under the laws to wind up its affairs is, during the period of liquidation, a corporation within the meaning of section 351 of the Revenue Act of 1934. 3. Id. - INTEREST. - Interest on purchase money notes is interest within the meaning of that term as used in section 351.
1Opinion of the Court
*723OPINION.
MuRdock:
The debtor which owed the petitioner the $3,400 “was chronically suffering from financial embarrassment” and the “petitioner was in imminent danger, not only of not collecting the interest” but of losing the principal payments due it. Cf. Turners Falls Power & Electric Co., 15 B. T. A. 983, 992. The petitioner had no reasonable anticipation at the close of 1935 of receiving the interest when it became due. Since collection was so doubtful, it did not have to accrue the item of $3,400. Cf. Great Northern Railway Co., 8 B. T. A. 225, 269; appeal dismissed, 40 Fed. (2d) 372;…
2Cases cited2 opinions
- Morrissey v. CommissionerSupreme Court of the United States · 1935
- Giovannangeli v. Levich & Pollach, Inc.New York Supreme Court · 1929
3Cited by17 opinions
- O'Sullivan Rubber Co. v. Commissioner of Int. Rev.Court of Appeals for the Second Circuit · 1941
- Fides, AG v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1943
- Bankers Union Life Ins. Co. v. CommissionerUnited States Tax Court · 1974
- Lake Gerar Development Co. v. CommissionerUnited States Tax Court · 1979
- Poro v. CommissionerUnited States Tax Court · 1963
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