Mackin Corp. v. Commissioner
United States Tax Court
Petitioner, a regular dealer in personal property on the installment plan, became qualified at the close of 1942 to elect, and did elect, under section 736 (a) of the Internal Revenue Code, to compute its income from installment sales, for excess profits tax purposes, on the accrual basis in lieu of the installment basis provided by section 44 (a). Pursuant thereto it filed amended excess profits tax returns for 1940 and 1941 with the income adjusted to the accrual basis.
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Petitioner, a regular dealer in personal property on the installment plan, became qualified at the close of 1942 to elect, and did elect, under section 736 (a) of the Internal Revenue Code, to compute its income from installment sales, for excess profits tax purposes, on the accrual basis in lieu of the installment basis provided by section 44 (a). Pursuant thereto it filed amended excess profits tax returns for 1940 and 1941 with the income adjusted to the accrual basis. During those years petitioner charged off as worthless certain installment accounts receivable arising out of sales made…
1Opinion of the Court
OPINION.
Artjndell, Judge:
Section 736 (a)1 was added to the Internal Revenue Code by section 222 (d) of the Revenue Act of 1942. It gave installment basis taxpayers who could qualify under its terms an election to report income for excess profits tax purposes on the accrual basis rather than the installment basis. A taxpayer who exercised the election was required to recompute his income for all prior excess profits tax taxable years on the accrual basis. The privilege applied only for excess profits tax purposes. For purposes of the income tax, an electing taxpayer was required to continue…
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