Mid-State Products Co. v. Commissioner
United States Tax Court
1. The petitioner was organized to engage in buying shell eggs and the selling of frozen eggs. It decided to explore the possibilities of entering the business of producing and selling dried eggs.
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1. The petitioner was organized to engage in buying shell eggs and the selling of frozen eggs. It decided to explore the possibilities of entering the business of producing and selling dried eggs. Expenditures made in its fiscal year 1941 in the course of such exploration, in acquainting itself with the prospects for the purchase of dried eggs by the Federal Government, and in preparing itself so that it might compete for business in such buying program, were charged to an account entitled "Deferred Development and Pre-Operating Expense," from which they were charged off and deducted in its…
1Opinion of the Court
OPINION.
TURNER, Judge:
“Deferred Development and Pre-Operating Expensed
Our first question is as to the deductibility of $15,239.39 expended by the petitioner during its fiscal year ended November 30, 1941, and capitalized on its books under the heading “Construction Account” and then in an account styled “Deferred Development and Pre-Operating Expense,” from which, during the fiscal years 1942 and 1943, it was charged as cost or expense in producing the first 6,000,000 pounds of dried eggs sold to the Surplus Marketing Administration. The expenditures in question were generally in the nature…
2Cases cited14 opinions
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- Musselman Hub-Brake Co. v. Com'r of Internal RevenueCourt of Appeals for the Sixth Circuit · 1943
- A. Finkenberg's Sons, Inc. v. CommissionerUnited States Tax Court · 1951
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