Krim-Ko Corp. v. Commissioner
United States Tax Court
1. Respondent's disallowance of deductions for additions to a reserve for bad debts for the years 1942 and 1944, approved. 2. Corporation, engaged primarily in manufacture and sale of chocolate syrup, entered into agreements with some of its customers wherein it agreed to furnish designated advertising material and services, and customers agreed to pay therefor a price per gallon for a specified number of gallons of syrup in excess of the base price paid by those not…
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1. Respondent's disallowance of deductions for additions to a reserve for bad debts for the years 1942 and 1944, approved. 2. Corporation, engaged primarily in manufacture and sale of chocolate syrup, entered into agreements with some of its customers wherein it agreed to furnish designated advertising material and services, and customers agreed to pay therefor a price per gallon for a specified number of gallons of syrup in excess of the base price paid by those not entering into such agreements. Advertising accounts carried in the names of participating customers were credited with amounts…
1Opinion of the Court
OPINION.
Raum, Judge:
1. Respondent disallowed deductions in the amounts of $4,400 for 1942 and $3,000 for 1944 taken by Krim-Ko as additions to its reserve for bad debts. Ordinarily, deductions based upon reserves are not allowed under the revenue laws (cf. Brown v. Helvering, 291 U. S. 193), and this was true originally as to bad debts. Section 23(h)(1) of the Internal Revenue Code represents an exception to the general rule; it allows as a deduction “(in the discretion of the Commissioner) a reasonable addition to a reserve for bad debts * * 1 However, Congress was unwilling to give the…
2Cases cited5 opinions
- Brown v. HelveringSupreme Court of the United States · 1934
- Your Health Club, Inc. v. CommissionerUnited States Tax Court · 1944
- South Tacoma Motor Co. v. CommissionerUnited States Tax Court · 1944
- Clay Sewer Pipe Asso. v. CommissionerUnited States Tax Court · 1943
- Capital Warehouse Co. v. CommissionerUnited States Tax Court · 1947
3Cited by69 opinions
- Automobile Club of New York, Inc. v. CommissionerUnited States Tax Court · 1959
- Roanoke Vending Exchange, Inc. v. CommissionerUnited States Tax Court · 1963
- Platt Trailer Co. v. CommissionerUnited States Tax Court · 1955
- Broadcast Measurement Bureau, Inc. v. CommissionerUnited States Tax Court · 1951
- Park Place, Inc. v. CommissionerUnited States Tax Court · 1972
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