Western Cartridge Co. v. Commissioner
United States Tax Court
1. In 1940 and 1941 taxpayer entered into three contracts with the United States. Under the terms of the 1940 contract the Government, upon request of taxpayer, was to make advance payments not to exceed 30 per cent of cost of procurement and installation of manufacturing facilities. Under the two 1941 contracts the Government was to make advance payments of 30 per cent of the purchase or contract price of certain products manufactured by taxpayer.
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1. In 1940 and 1941 taxpayer entered into three contracts with the United States. Under the terms of the 1940 contract the Government, upon request of taxpayer, was to make advance payments not to exceed 30 per cent of cost of procurement and installation of manufacturing facilities. Under the two 1941 contracts the Government was to make advance payments of 30 per cent of the purchase or contract price of certain products manufactured by taxpayer. Taxpayer, at its request, reimbursed the Government by check for a portion of the advance payments under the 1940 contract in lieu of crediting…
1Opinion of the Court
OPINION.
Van Fossan, Jvdge:
The first question to be considered is whether the repayments in 1942, of $2,150,000 on contract No. W-OKD-481, $633,583.05 on contract No. 478 ORD-3, and $1,971,111.52 on contract No. 478 ORD-40, of moneys received by petitioner from the Government under the respective contracts entitle it to a credit for debt retirement under section 783 of the Internal Revenue Code. The determination of this question is dependent upon whether the advance payments constituted an “indebtedness” within the meaning of section 783 (d), which is as follows:(d) Definition of…
2Cases cited2 opinions
- Gibson Products Co. v. CommissionerUnited States Tax Court · 1947
- Gould & Eberhardt, Inc. v. CommissionerUnited States Tax Court · 1947
3Cited by1 opinion
- Western Cartridge Co. v. CommissionerUnited States Tax Court · 1948