Whitaker v. Commissioner
United States Tax Court
1. The petitioner's stallion performed breeding services in the spring of the year and the foal was born to the mare in the following year. The petitioner guaranteed a live foal to the owners of the mares. He reported fees received in the year of breeding in the following year after the foal was born since he was required to refund the fees if a live foal was not born. The respondent determined that fees received in the year of breeding were income in that year.
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1. The petitioner's stallion performed breeding services in the spring of the year and the foal was born to the mare in the following year. The petitioner guaranteed a live foal to the owners of the mares. He reported fees received in the year of breeding in the following year after the foal was born since he was required to refund the fees if a live foal was not born. The respondent determined that fees received in the year of breeding were income in that year. Held, the petitioner's method of reporting these fees did not clearly reflect his income; the contingent liability does not justify…
1Opinion of the Court
OPINION.
Black, Judge:
Issue 1.
The first question presented is whether breeding fees received in the year of breeding are income in that year or in the following year when the foal is born. (Mares were bred in the spring and foals were born 11 months later, in the following year.)
The respondent determined that the fees are income in the year received on the ground that the petitioner was on the cash basis or, on the alternative ground, that the petitioner received the fees under a “claim of right” and they are income in the year received regardless of the basis of accounting used. The…
2Cases cited6 opinions
- Commissioner v. HeiningerSupreme Court of the United States · 1943
- Brown v. HelveringSupreme Court of the United States · 1934
- E. W. Schuessler and Aline Schuessler v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1956
- Schuessler v. CommissionerUnited States Tax Court · 1955
- Heininger v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1943
1 more not listed; retrieve them via the Exa API.
3Cited by15 opinions
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- Hall v. CommissionerUnited States Tax Court · 1976
- Town Park Hotel Corp. v. CommissionerUnited States Tax Court · 1970
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