Sierracin Corp. v. Commissioner
United States Tax Court
Petitioner used the completed-contract method to account for income from several of its manufacturing divisions. Held: (1) Items produced by two of petitioner's divisions were "unique items" within the meaning of sec. 1.451-3(b)(1)(ii), Income Tax Regs., and petitioner's use of the completed-contract method to account for income from these two divisions consequently was proper; and (2) contracts entered into by those two divisions need not be severed by delivery because each…
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Petitioner used the completed-contract method to account for income from several of its manufacturing divisions. Held: (1) Items produced by two of petitioner's divisions were "unique items" within the meaning of sec. 1.451-3(b)(1)(ii), Income Tax Regs., and petitioner's use of the completed-contract method to account for income from these two divisions consequently was proper; and (2) contracts entered into by those two divisions need not be severed by delivery because each delivery was not independently priced. Held, further, respondent's determinations as to petitioner's other divisions…
1Opinion of the Court
COHEN, Judge:
Respondent determined deficiencies in petitioner’s corporate income tax as follows:
Year Deficiency
1976 . $519,726
1977 . 359,422
1979 . 421,040
1980 . 1,361,312
After concessions, the issues for decision are (1) whether, during the years in issue, petitioner was entitled to use the completed-contract method of accounting for three of its divisions, and, if so, (2) whether certain contracts must be severed by delivery in order to clearly reflect income.
FINDINGS OF FACT
Some of the facts have been stipulated, and the facts set forth in the stipulation are incorporated in our findings by…
2Cases cited11 opinions
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Metcalf & Eddy v. MitchellSupreme Court of the United States · 1926
- Thor Power Tool Co. v. CommissionerSupreme Court of the United States · 1979
- Peninsula Steel Products & Equipment Co. v. CommissionerUnited States Tax Court · 1982
- Reco Industries, Inc. v. CommissionerUnited States Tax Court · 1984
6 more not listed; retrieve them via the Exa API.
3Cited by2 opinions
- Schouten v. CommissionerUnited States Tax Court · 1991
- Sierracin Corp. v. CommissionerUnited States Tax Court · 1988