United States v. John Catto, Jr., and Roxana Catto, His Wife

This appeal raises once again the problem of the tax and accounting treatment to be accorded raised breeding cattle which are sold by an accrual basis taxpayer. 1 *The appellees, who are owners and operators of two cattle ranches in West Texas, keep their books on the accrual basis and file their tax returns accordingly.

Taxpayers, in conformity with Treasury regulations, 2 have chosen to value -their inventory by the unitdivestockprice method. If this method is used, standard unit values are assigned to different classes of animals within the herd, representing estimated rather than actual…