Young Door Co., Eastern Div. v. Commissioner
United States Tax Court
Petitioner deducted on its Federal income tax returns for the calendar years 1958 and 1959, and for the taxable period January 1 to April 30, 1960, commission compensation which was authorized by resolution of its board of directors to be paid to its controlling stockholders 90 days after the close of the taxable year. The commissions were accrued on petitioner's books but were not paid within 2 1/2 months following the close of the taxable periods in question.
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Petitioner deducted on its Federal income tax returns for the calendar years 1958 and 1959, and for the taxable period January 1 to April 30, 1960, commission compensation which was authorized by resolution of its board of directors to be paid to its controlling stockholders 90 days after the close of the taxable year. The commissions were accrued on petitioner's books but were not paid within 2 1/2 months following the close of the taxable periods in question. Held, the deductions claimed by petitioner are prohibited by section 267(a)(2) of the Internal Revenue Code of 1954.
1Opinion of the Court
Bruce, Judge:
The respondent determined deficiencies in the income taxes of petitioner for the calendar years 1958 and 1959, and for the taxable period January 1 to April 30,1960, respectively, in the amounts of $15,067.78, $18,161.68, and $5,724.89.
The sole issue is whether or not the commissions accrued by petitioner in the calendar years 1958 and 1959 and the taxable period January 1 to April 30,1960, but not paid within 2% months following the close of such taxable periods, are prohibited as deductions pursuant to the provisions of section 267(a) (2) of the Internal Eevenue Code of 1954.
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2Cases cited12 opinions
- Michael Flynn Mfg. Co. v. CommissionerUnited States Tax Court · 1944
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- Basila v. CommissionerUnited States Tax Court · 1961
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