South Tacoma Motor Co. v. Commissioner
United States Tax Court
Petitioner sold, for cash, coupon books entitling the purchaser to certain services, which might be called for and performed after the year of sale. The purchaser had the right to rescind and receive a refund. The petitioner set up the amount received as a liability, and, when a coupon was later presented and service rendered, charged itself with an aliquot part of the original sale price as income, and entered as expense the cost of the service.
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Petitioner sold, for cash, coupon books entitling the purchaser to certain services, which might be called for and performed after the year of sale. The purchaser had the right to rescind and receive a refund. The petitioner set up the amount received as a liability, and, when a coupon was later presented and service rendered, charged itself with an aliquot part of the original sale price as income, and entered as expense the cost of the service. Held, the entire amount received for the coupon books was income in the year when received upon sale. Brown v. Helvering, 291 U.S. 193; South Dade…
1Opinion of the Court
OPINION.
Disney, Judge:
During each of the taxable years in question, petitioner reported as gross income from the sales of the coupon books described in the facts above only that part of the proceeds therefrom which ivas represented by the actual performance by petitioner during the particular taxable year of the services specified in the agreement. Petitioner carried the balance of the proceeds on its books of account as a liability.
Petitioner contends that his method of accounting and of reporting income from the sales of the coupon books is entirely consistent with the following applicable…
2Cases cited1 opinion
- Brown v. HelveringSupreme Court of the United States · 1934
3Cited by31 opinions
- Krim-Ko Corp. v. CommissionerUnited States Tax Court · 1951
- Beacon Publishing Company, a Kansas Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1955
- Automobile Club of New York, Inc. v. CommissionerUnited States Tax Court · 1959
- Your Health Club, Inc. v. CommissionerUnited States Tax Court · 1944
- Veenstra & De Haan Coal Co. v. CommissionerUnited States Tax Court · 1948
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