Hudson v. Commissioner
United States Tax Court
Petitioners paid sales taxes in acquiring farm machinery qualifying for the investment credit, and, in some instances, used machines were traded in and additional cash paid in acquiring the new machines. Petitioners computed basis for purposes of the investment tax credit by adding sales taxes paid to the price of the machinery acquired.
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Petitioners paid sales taxes in acquiring farm machinery qualifying for the investment credit, and, in some instances, used machines were traded in and additional cash paid in acquiring the new machines. Petitioners computed basis for purposes of the investment tax credit by adding sales taxes paid to the price of the machinery acquired. Held: Since taxpayers deducted the sales taxes currently rather than electing to capitalize them under sec. 266, I.R.C. 1954, the sales taxes are not included in basis. Additionally, where trade-ins are involved, petitioners' basis is not the list price of…
1Opinion of the Court
OPINION
Wilbur, Judge.
Respondent determined a deficiency of $1,057.80 in petitioners’ 19731 Federal income taxes. The issues presented for our decision are:(1) Whether sales tax may be included in the basis of new section 382 property in computing the investment tax credit, and(2) Whether the trade-in allowance or the adjusted basis of property traded in is utilized in determining the basis of new section 38 property received in an exchange where no gain or loss was recognized.
All of the facts have been stipulated. The stipulation of facts and the attached exhibits are incorporated herein by…
2Cases cited4 opinions
- United Telecommunications, Inc. (Formerly United Utilities, Incorporated) v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1978
- United Telecommunications, Inc. v. CommissionerUnited States Tax Court · 1975
- United Telecommunications, Inc. v. CommissionerUnited States Tax Court · 1977
- James G. Smyth, United States Collector of Internal Revenue v. John A. Sullivan, of the Estate of Emma L. Merritt, DeceasedCourt of Appeals for the Ninth Circuit · 1955
3Cited by3 opinions
- Maack v. CommissionerUnited States Tax Court · 1983
- Johnson v. CommissionerUnited States Tax Court · 1991
- Hudson v. CommissionerUnited States Tax Court · 1981