Koby v. Commissioner
United States Tax Court
1. Petitioner kept his books and filed his income tax returns on the cash basis for 1942, and for many years prior thereto. However, since the purchase and sale of merchandise was an income-producing factor, petitioner should have been on an accrual basis during those years. For 1942 respondent recomputed petitioner's gross income on an accrual basis and made certain adjustments to reflect the transition in reporting income from the cash to an accrual basis.
Read the full summary
1. Petitioner kept his books and filed his income tax returns on the cash basis for 1942, and for many years prior thereto. However, since the purchase and sale of merchandise was an income-producing factor, petitioner should have been on an accrual basis during those years. For 1942 respondent recomputed petitioner's gross income on an accrual basis and made certain adjustments to reflect the transition in reporting income from the cash to an accrual basis. Held, that petitioner should properly have reported his income on an accrual basis for 1942, and the adjustments in gross income made by…
1Opinion of the Court
OPINION.
HaRron, Judge-.
The principal issue in this proceeding is whether respondent erred in requiring that petitioner’s gross income for the year 1942 be adjusted to reflect a necessary change from the cash to an accrual basis of accounting in the method under which petitioner reported his income. The adjustments made by respondent were: (1) Opening inventory on January 1, 1942, was disallowed as part of the cost of goods sold because it represented purchases which had been deducted as expenses in prior years on the cash basis, and, if in the year of change from the cash to an accrual basis…
2Cases cited7 opinions
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Brown v. HelveringSupreme Court of the United States · 1934
- Niles Bement Pond Co. v. United StatesSupreme Court of the United States · 1930
- Greene Motor Co. v. CommissionerUnited States Tax Court · 1945
- Mnookin v. CommissionerUnited States Tax Court · 1949
2 more not listed; retrieve them via the Exa API.
3Cited by23 opinions
- Mennuto v. CommissionerUnited States Tax Court · 1971
- Iley v. CommissionerUnited States Tax Court · 1952
- Sutor v. CommissionerUnited States Tax Court · 1951
- Welp v. United StatesDistrict Court, N.D. Iowa · 1952
- Sullivan v. CommissionerUnited States Tax Court · 1951
18 more not listed; retrieve them via the Exa API.