Reco Industries, Inc. v. Commissioner
United States Tax Court
Petitioner, a manufacturer of custom-order steel products, reported its income under the completed contract method of long-term contract accounting. Petitioner maintained raw materials and work-in-process inventories. The costs of raw materials, labor, and overhead associated with the completion of a long-term contract were accumulated in work-in-process inventory accounts.
Read the full summary
Petitioner, a manufacturer of custom-order steel products, reported its income under the completed contract method of long-term contract accounting. Petitioner maintained raw materials and work-in-process inventories. The costs of raw materials, labor, and overhead associated with the completion of a long-term contract were accumulated in work-in-process inventory accounts. In the year of contract completion, income was recognized, and associated contract costs were deducted from inventory and charged to cost of goods sold. Prior to 1974, petitioner valued its inventories on the first-in,…
1Opinion of the Court
OPINION
Jacobs, Judge:*
Respondent determined the following deficiencies in the income taxes of RECO Industries, Inc., and its wholly owned subsidiaries:
TYE Dec. 31— Deficiency
1974 . $799,448.73
1975 . 5,157.68
1976 . 393,002.56
The sole issue for decision is whether petitioner, which reports its income for Federal income tax purposes under the completed contract method of accounting, may compute its costs using the last-in, first-out (LIFO) method of inventory valuation.
The facts of this case have been fully stipulated and are so found. The parties’ stipulation together with the accompanying…
2Cases cited21 opinions
- Commissioner v. HansenSupreme Court of the United States · 1959
- Colony, Inc. v. CommissionerSupreme Court of the United States · 1958
- United States v. CattoSupreme Court of the United States · 1966
- Albert Gersten, Myron P. Beck and Ann H. Beck, Milton Gersten and Mary Gersten v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1959
- Colony, Inc. v. CommissionerUnited States Tax Court · 1956
16 more not listed; retrieve them via the Exa API.
3Cited by35 opinions
- Capitol Fed. Sav. & Loan Ass'n v. CommissionerUnited States Tax Court · 1991
- Ansley-Sheppard-Burgess Co. v. CommissionerUnited States Tax Court · 1995
- Hamilton Industries, Inc. v. CommissionerUnited States Tax Court · 1991
- RLC Indus. Co. v. CommissionerUnited States Tax Court · 1992
- General Dynamics Corp. v. CommissionerUnited States Tax Court · 1997
30 more not listed; retrieve them via the Exa API.