Reuben H. Donnelley Corp. v. Commissioner
United States Board of Tax Appeals
1. CONTINGENT RESERVES NOT DEDUCTIBLE. - Where petitioner set up on its books during a taxable year certain reserves for the payment of salesmen's commissions which should come due in the following year when and if the accounts upon which they are based are paid, held, such reserves are not deductible in determining taxpayer's net income. 2. INVENTORIES used in computing the cost of goods sold must be computed at the beginning and end of each year on substantially the same…
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1. CONTINGENT RESERVES NOT DEDUCTIBLE. - Where petitioner set up on its books during a taxable year certain reserves for the payment of salesmen's commissions which should come due in the following year when and if the accounts upon which they are based are paid, held, such reserves are not deductible in determining taxpayer's net income. 2. INVENTORIES used in computing the cost of goods sold must be computed at the beginning and end of each year on substantially the same basis. Respondent's action in excluding items amounting to $86,814.20 from petitioner's opening inventory in 1923 and…
1Opinion of the Court
*178OPINION.
Black:
Petitioner complains of two errors committed by the respondent. (1) The action of respondent in disallowing as a deduction, reserves of $12,931.18 for the year 1923 and $29,954.18 for the year 1924, set up on the books of the petitioner to pay commissions to salesmen on advertising contracts which they had secured for petitioner; (2) the action of the respondent in adding $86,814.20 to petitioner’s income for 1923 by reducing petitioner’s opening inventory for 1923 in that amount.
Section 212(b) of the Revenue Act of 1921, which was applicable to the return of the taxpayer for…
2Cases cited2 opinions
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- American National Co. v. United StatesSupreme Court of the United States · 1927
3Cited by10 opinions
- National Fireworks, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1957
- E. J. Scheer, Inc. v. CommissionerUnited States Tax Court · 1949
- Air-Way Electric Appliance Corp. v. GuitteauDistrict Court, N.D. Ohio · 1939
- Carmichael Tile Co. v. CommissionerUnited States Tax Court · 1950
- Estate of Hugh Smith v. CommissionerUnited States Tax Court · 1947
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