Bentley Laboratories, Inc. v. Commissioner
United States Tax Court
T Corp., an accrual basis corporation with a fiscal year ending Nov. 30, sells its products to a wholly owned domestic international sales corporation (DISC), with a fiscal year ending Jan. 31. The transfer price for T's sales to the DISC is determined at the end of the DISC's fiscal year under the intercompany pricing rules of sec. 994, I.R.C. 1954. T does not report the gross income from its sales to the DISC until the end of the DISC's fiscal year in which such sales…
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T Corp., an accrual basis corporation with a fiscal year ending Nov. 30, sells its products to a wholly owned domestic international sales corporation (DISC), with a fiscal year ending Jan. 31. The transfer price for T's sales to the DISC is determined at the end of the DISC's fiscal year under the intercompany pricing rules of sec. 994, I.R.C. 1954. T does not report the gross income from its sales to the DISC until the end of the DISC's fiscal year in which such sales occur. Accordingly, the gross income from T's sales to the DISC from Feb. 1 through Nov. 30 of T's fiscal year is not…
1Opinion of the Court
OPINION
Raum, Judge:
The Commissioner determined deficiencies of $453,968 and $438,995 in petitioners’ 1972 and 1973 income taxes, respectively. Petitioner Bentley Laboratories, Inc. (Bentley Labs or Labs), owns all of the stock of Bentley International Ltd., a domestic international sales corporation (DISC or International). Bentley Labs is an accrual basis taxpayer with a fiscal year ending November 30, and the DISC is an accrual basis taxpayer with a fiscal year ending January 31. The principal issue is whether profit from sales of products by Bentley Labs to the DISC should be included in…
2Cases cited21 opinions
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- Automobile Club of New York, Inc. v. CommissionerUnited States Tax Court · 1959
- Automobile Club of New York, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1962
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