York Water Co. v. Commissioner
United States Tax Court
Petitioner is a public utility water corporation. In 1955 the highway commission proposed to build a road through a tract of land which petitioner considered a possible future site for expansion of its reservoir and watershed. After negotiation, in 1956 petitioner entered into an agreement to pay $ 185,427 to the State to defray a part of the cost of rerouting the proposed road around the tract of land.
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Petitioner is a public utility water corporation. In 1955 the highway commission proposed to build a road through a tract of land which petitioner considered a possible future site for expansion of its reservoir and watershed. After negotiation, in 1956 petitioner entered into an agreement to pay $ 185,427 to the State to defray a part of the cost of rerouting the proposed road around the tract of land. Held, respondent's disallowance of said amount as a deduction is approved because petitioner has failed to show that it qualifies as a business expense deductible under section 162 or an…
1Opinion of the Court
Mulroney, Judge:
The respondent determined a deficiency in petitioner’s 1956 corporate income tax of $87,778.30.
Petitioner incurred a liability of $185,427 hi 1956 under an agreement with the Pennsylvania Department of Highways. The issue for decision is whether said liability constituted an ordinary and necessary business expense deductible under section 162,1.R.C. 1954,1 or an ordinary loss deductible under section 165.
FINDINGS OF FACT.
Some of the facts have been stipulated and they are found accordingly.
Petitioner, the York Water Company, is a public utility corporation subject to the…
2Cases cited12 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Snow v. CommissionerUnited States Tax Court · 1958
- Dinardo v. CommissionerUnited States Tax Court · 1954
- Alleghany Corp. v. CommissionerUnited States Tax Court · 1957
- Kauai Terminal, Ltd. v. CommissionerUnited States Board of Tax Appeals · 1937
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- Fitzsimons v. CommissionerUnited States Tax Court · 1961
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