World Airways, Inc. v. Commissioner
United States Tax Court
1. Petitioner World Airways, Inc., a supplemental air carrier authorized to provide charter air transportation service, was required to overhaul its aircraft at prescribed intervals in accordance with maintenance programs established pursuant to FAA regulations. Petitioner's maintenance program provided for the overhaul of its airframes and engines upon the completion of a prescribed number of flight-hours. The time between overhauls was frequently increased.
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1. Petitioner World Airways, Inc., a supplemental air carrier authorized to provide charter air transportation service, was required to overhaul its aircraft at prescribed intervals in accordance with maintenance programs established pursuant to FAA regulations. Petitioner's maintenance program provided for the overhaul of its airframes and engines upon the completion of a prescribed number of flight-hours. The time between overhauls was frequently increased. Overhauls of petitioner's jet engines and airframes were made by TWA under a contract which provided for an initial payment upon the…
1Opinion of the Court
Bruce, Judge:
Respondent determined deficiencies in petitioners’ income tax for the years and in the amounts as follows:
Tear Deficiency
1965 _$45,095
1966 _ 873,121
Other issues raised by the pleadings having been disposed of by agreement between the parties, the following two issues remain for our consideration:(1) Whether petitioner may accrue and deduct in each year a portion of estimated costs for the future overhauls of its aircraft engines and airframes; and(2) Whether petitioner is entitled to an investment credit for an airplane leased to the Federal Aviation Administration for a series…
2Cases cited28 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Old Colony Railroad v. CommissionerSupreme Court of the United States · 1932
- Brown v. HelveringSupreme Court of the United States · 1934
- Security Flour Mills Co. v. CommissionerSupreme Court of the United States · 1944
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3Cited by55 opinions
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- Ridder v. CommissionerUnited States Tax Court · 1981
- World Airways, Inc., and World Air Center, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1977
- Bloomberg v. CommissionerUnited States Tax Court · 1980
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