Lutz v. Commissioner
United States Tax Court
1. In 1934, 1935, and 1936, petitioner, a furniture and appliance retailer who did approximately 95 per cent of his business on a credit basis, went through his individual accounts receivable ledger and selected certain doubtful accounts to be charged off as worthless debts. He set up a bad debt reserve account, to which he added the total amount of such alleged chargeoffs. He claimed a like amount for worthless debts on his income tax returns for each of those years.
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1. In 1934, 1935, and 1936, petitioner, a furniture and appliance retailer who did approximately 95 per cent of his business on a credit basis, went through his individual accounts receivable ledger and selected certain doubtful accounts to be charged off as worthless debts. He set up a bad debt reserve account, to which he added the total amount of such alleged chargeoffs. He claimed a like amount for worthless debts on his income tax returns for each of those years. In the years following 1936, he claimed no further deductions on his returns for worthless debts or for additions to a reserve…
1Opinion of the Court
OPINION.
Rice, Judge:
The issue in this case with respect to the reductions made in 1943 and 1945 in petitioner’s account designated reserve for uncollected accounts receivable is whether he used the reserve method or the direct chargeoff method in claiming deductions for worthless debts. The respondent determined that petitioner was on the reserve method; petitioner argues that he was on the direct chargeoff method.
From the time petitioner began business in 1932, and throughout all of the years here material, the Code and previous revenue acts have permitted taxpayers to claim deductions in…
2Cases cited9 opinions
- Maryland Casualty Co. v. United StatesSupreme Court of the United States · 1920
- Geyer, Cornell & Newell, Inc. v. CommissionerUnited States Tax Court · 1946
- Krim-Ko Corp. v. CommissionerUnited States Tax Court · 1951
- Wichita Coca Cola Bottling Co. v. United StatesCourt of Appeals for the Fifth Circuit · 1945
- Platt Trailer Co. v. CommissionerUnited States Tax Court · 1955
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3Cited by16 opinions
- West Seattle Nat'l Bank v. CommissionerUnited States Tax Court · 1959
- Handelman v. CommissionerUnited States Tax Court · 1961
- McCamant v. CommissionerUnited States Tax Court · 1959
- Bird Management, Inc. v. CommissionerUnited States Tax Court · 1967
- J. E. Hawes Corp. v. CommissionerUnited States Tax Court · 1965
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