Kauai Terminal, Ltd. v. Commissioner
United States Board of Tax Appeals
1. A contribution by a transportation company to the United States of part of the cost of a breakwater, made because imposed by the United States as a condition to the construction and because it would result in economic benefit to the corporation for years to come, held not deductible as an ordinary and necessary expense of carrying on a trade or business. 2. A fire insurance premium covering a fiscal year, which is charged off, in accordance with taxpayer's regular…
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1. A contribution by a transportation company to the United States of part of the cost of a breakwater, made because imposed by the United States as a condition to the construction and because it would result in economic benefit to the corporation for years to come, held not deductible as an ordinary and necessary expense of carrying on a trade or business. 2. A fire insurance premium covering a fiscal year, which is charged off, in accordance with taxpayer's regular accounting method, in the year of payment, held deductible in the calendar year paid.
1Opinion of the Court
*895OPINION.
Sternhagen:
1. The petitioner in 1933 deducted the $200,000 which it contributed to the cost of the new breakwater, the $17,517.93 which was the 1910 cost of construction of the old breakwater, and the $3,940.20, preliminary expenses incurred in preparing data and sending a representative to "Washington in the course of the investi*896gation of the project. In disallowing the deduction the Commissioner said that the taxpayer “received in return a valuable asset, either tangible or intangible, adding to the value of its property, which, should be capitalized.” The taxpayer relies upon…
2Cases cited1 opinion
- Old Mission Portland Cement Co. v. HelveringSupreme Court of the United States · 1934
3Cited by28 opinions
- Martin J. And Margaret M. Zaninovich and Vincent M. And Dorothy F. Zaninovich v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1980
- Fall River Gas Appliance Company, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1965
- Hunter v. CommissionerUnited States Tax Court · 1966
- Fall River Gas Appliance Co. v. CommissionerUnited States Tax Court · 1964
- Heigerick v. CommissionerUnited States Tax Court · 1966
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