Comprehensive Designers International, Ltd. v. Commissioner
United States Tax Court
On its Federal income tax return for fiscal 1967, petitioner claimed a foreign tax credit for its accrued United Kingdom tax liability by translating such liability from pounds sterling into U.S. dollars on the basis of foreign exchange rates in effect at the close of such taxable year. When the United Kingdom taxes were subsequently paid, the value of the British pound had declined in relation to the U.S. dollar.
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On its Federal income tax return for fiscal 1967, petitioner claimed a foreign tax credit for its accrued United Kingdom tax liability by translating such liability from pounds sterling into U.S. dollars on the basis of foreign exchange rates in effect at the close of such taxable year. When the United Kingdom taxes were subsequently paid, the value of the British pound had declined in relation to the U.S. dollar. Held, sec. 905(c) requires a redetermination of petitioner's foreign tax credit for fiscal 1967 to reflect the dollar cost of the foreign taxes at the time of payment. Petitioner…
1Opinion of the Court
Tannenwald, Judge:
The respondent determined the following deficiencies in petitioner’s Federal income taxes:
TYEAPR.30— Deficiency
1967_ $168,077.53
1968_ 156,568.00
Two issues require consideration: (1) Whether a downward adjustment should be made to the foreign tax credit claimed by petitioner for the taxable year ended April 30, 1967, and (2) whether petitioner is entitled to deductions for payments it made under a pension arrangement for its United Kingdom employees for the taxable years ended April 30, 1967, and April 30, 1968 (hereinafter fiscal 1967 and fiscal 1968, respectively).
FINDINGS…
2Cases cited10 opinions
- Helvering v. R. J. Reynolds Tobacco Co.Supreme Court of the United States · 1939
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