Ewald & Co. v. Commissioner
United States Board of Tax Appeals
1. The petitioner took deductions for bad debts in its return for 1921 by the charge-off method, and thereafter, in 1922, changed to the reserve method, claiming deductions of additions to a reserve for bad debts, without first having obtained permission of the Commissioner to change to the latter method. Held that the deductions for additions to the reserve for bad debts may not be allowed.
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1. The petitioner took deductions for bad debts in its return for 1921 by the charge-off method, and thereafter, in 1922, changed to the reserve method, claiming deductions of additions to a reserve for bad debts, without first having obtained permission of the Commissioner to change to the latter method. Held that the deductions for additions to the reserve for bad debts may not be allowed. Kay Manufacturing Co.,18 B.T.A. 753. 2. Held, further, that the petitioner in computing net income is entitled to deduct the total amount of debts ascertained to be worthless and charged off within each…
1Opinion of the Court
*1131OPINION.
Teammell :
The Revenue Acts of 1921 and 1924 provide in section 234 (a) that in computing the net income of a corporation there shall be allowed as deductions:(5) Debts ascertained to be worthless and charged oft within the taxable year (or in the discretion of the Commissioner, a reasonable addition to a reserve for bad debts); * * *
*1132Regulations 62, promulgated by the Commissioner under the provisions of the Revenue Act of 1921, provides in part as follows:
Abt. 151. Bad dol)ts. — Bad debts may be treated in either of two ways— (1) by a deduction from income in respect of debts…
2Cited by4 opinions
- Brown v. United StatesDistrict Court, E.D. Pennsylvania · 1937
- Century Die Casting Co. v. CommissionerUnited States Tax Court · 1943
- Ewald & Co. v. CommissionerUnited States Board of Tax Appeals · 1930
- First Nat'l Bank v. CommissionerUnited States Board of Tax Appeals · 1932