Flaxlinum Insulating Co. v. Commissioner
United States Board of Tax Appeals
1. Use and occupancy insurance involved in this proceeding was compensation for the loss of a property right, and was not dependent upon or measured by the loss of profits in the operation of the business in connection with which such property was used. 2. The owner of the property destroyed by fire proceeded in good faith to replace the same, and the amount of the use and occupancy insurance in excess of the ordinary fire insurance received thereon used for such replacement…
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1. Use and occupancy insurance involved in this proceeding was compensation for the loss of a property right, and was not dependent upon or measured by the loss of profits in the operation of the business in connection with which such property was used. 2. The owner of the property destroyed by fire proceeded in good faith to replace the same, and the amount of the use and occupancy insurance in excess of the ordinary fire insurance received thereon used for such replacement was not a gain to be included in gross income. 3. The accrual method of accounting employed by petitioner in keeping…
1Opinion of the Court
*685OPINION.
Littleton:
The Commissioner included the total of the use and occupancy insurance, amounting to $80,000.10, in the petitioner’s gross income for 1918, and contends that his action in this regard should be approved for the reason that the use and occupancy policies insured profits prevented by the fire. On the other hand, the petitioner contends that the use and occupancy insurance was per diem compensation, that is, a fixed sum for each day of enforced idleness and proportionately for partial idleness, and that the settlements between the insurers and the insured were on that basis;…
2Cases cited2 opinions
- Heim v. American Alliance Insurance Co. of New YorkSupreme Court of Minnesota · 1920
- Brecher Furniture Co. v. Firemen's InsuranceSupreme Court of Minnesota · 1923
3Cited by2 opinions
- Shakertown Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1960
- Flaxlinum Insulating Co. v. CommissionerUnited States Board of Tax Appeals · 1926