Lamm Lumber Co. v. Commissioner
United States Board of Tax Appeals
1. Taxpayer on the accrual basis is entitled to accrue the value of certain equipment in the year the right to receive it becomes fixed, notwithstanding actual delivery is not made until a subsequent year when all controversies respecting possession and title are settled. 2. On account of the critical financial condition of petitioner corporation its president was allowed to withdraw only $10,000 of his $24,000 salary, and the remainder was carried as an account payable.
Read the full summary
1. Taxpayer on the accrual basis is entitled to accrue the value of certain equipment in the year the right to receive it becomes fixed, notwithstanding actual delivery is not made until a subsequent year when all controversies respecting possession and title are settled. 2. On account of the critical financial condition of petitioner corporation its president was allowed to withdraw only $10,000 of his $24,000 salary, and the remainder was carried as an account payable. Held, under the facts the accrued salary of $24,000 was deductible as an ordinary and necessary business expense incurred…
1Opinion of the Court
ARNold:
This proceeding involves an income tax deficiency of $16,558.93 for the year 1936, of which $6,953.37 is normal tax and $9,605.56' is surtax on undistributed profits. Petitioner reported a net loss for the calendar year, but respondent, by virtue of various adjustments, determined a net income of $54,089.16. Petitioner challenges respondent’s determination in the following particulars: (1) The inclusion in 1936 gross income of $20,000 representing income received as damages for breach of contract; (2) the disallowance of $14,000.04 as salary to petitioner’s president; (3) the…
2Cases cited3 opinions
- Spring City Foundry Co. v. CommissionerSupreme Court of the United States · 1934
- Helvering v. Northwest Steel Rolling Mills, Inc.Supreme Court of the United States · 1940
- Continental Tie & Lumber Co. v. United StatesSupreme Court of the United States · 1932
3Cited by5 opinions
- United Control Corp. v. CommissionerUnited States Tax Court · 1962
- C. C. Clark, Inc. v. United StatesCourt of Appeals for the Fifth Circuit · 1942
- Helms Bakeries v. CommissionerUnited States Board of Tax Appeals · 1942
- Lamm Lumber Co. v. CommissionerUnited States Board of Tax Appeals · 1941
- W. C. Richards Co. v. CommissionerUnited States Tax Court · 1966