Apex Electrical Mfg. Co. v. Commissioner
United States Tax Court
Income -- Compensation for War Contract Termination. -- Upon cancellation and termination of a war subcontract in 1942 petitioner filed claim against the prime contractor for damages for estimated anticipated profits which might have been earned on services petitioner was not permitted to perform. The prime contractor denied any liability.
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Income -- Compensation for War Contract Termination. -- Upon cancellation and termination of a war subcontract in 1942 petitioner filed claim against the prime contractor for damages for estimated anticipated profits which might have been earned on services petitioner was not permitted to perform. The prime contractor denied any liability. Held, that both prior and subsequent to the enactment of the Contract Settlement Act of 1944 petitioner had no fixed right to receive payment on its claim; that any amount it might receive was not reasonably ascertainable prior to final settlement in 1947;…
1Opinion of the Court
OPINION.
Tietjens, Judge:
The issue herein presents the primary question of whether respondent erred in including in petitioner’s income for the taxable year 1944, the amount of $289,815.54 received in 1947 in final settlement of a claim arising out of the cancellation and termination, in 1942, of a subcontract for production of materials for national defense. The supplementary questions involved are whether 1944 is a proper year for accrual of that amount for tax purposes under the facts herein and whether the applicable regulation required in the inclusion of that amount in income in 1944 as…
2Cases cited13 opinions
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