George K. Herman Chevrolet, Inc. v. Commissioner
United States Tax Court
Petitioner, a franchise Chevrolet and Buick dealer using the accrual method of accounting, contributed certain amounts to the advertising and promotional funds administered and operated by General Motors Corporation. On November 29, 1956, petitioner was advised by General Motors that dealer contributions to the funds would terminate on November 30, 1956, and the unspent balance of petitioner's contributions would be refunded.
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Petitioner, a franchise Chevrolet and Buick dealer using the accrual method of accounting, contributed certain amounts to the advertising and promotional funds administered and operated by General Motors Corporation. On November 29, 1956, petitioner was advised by General Motors that dealer contributions to the funds would terminate on November 30, 1956, and the unspent balance of petitioner's contributions would be refunded. Petitioner's practice was to debit its advertising expense account at the time it sold each car. The amount in the account was deducted by petitioner as advertising…
1Opinion of the Court
Dawson, Judge:
Respondent determined a deficiency in income tax against the petitioner for the taxable year 1956 in the amount of $8,542.74.
The issues presented for decision are:(1) Whether the petitioner’s right to receive a refund from the General Motors Advertising and Promotional Funds became fixed and the amount thereof ascertainable with reasonable accuracy during 1956 so as to require it to be accrued as income in that year.(2) Whether the petitioner’s method of deducting payments to the General Motors Advertising and Promotional Funds was proper and clearly reflected income.
FINDINGS OF…
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