Streight Radio & Television, Inc. v. Commissioner
United States Tax Court
1. Petitioner, an accrual basis taxpayer, was in the business of selling television sets during the taxable year. In consideration of a portion of the total sales price, it entered into service contracts with its customers whereby it agreed to service the sets for 1 year. Petitioner attempted to defer the amounts charged for the service contracts in proportion to the number of months the contracts entered into during the taxable year would extend into the following year.
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1. Petitioner, an accrual basis taxpayer, was in the business of selling television sets during the taxable year. In consideration of a portion of the total sales price, it entered into service contracts with its customers whereby it agreed to service the sets for 1 year. Petitioner attempted to defer the amounts charged for the service contracts in proportion to the number of months the contracts entered into during the taxable year would extend into the following year. During the taxable year, petitioner received only a part of the total amount charged for the service contracts. Petitioner…
1Opinion of the Court
Train, Judge:
Respondent determined a deficiency in petitioner’s income tax for the fiscal year ended October 31, 1950, in the amount of $14,245.82.
The issues are:(1) Whether petitioner may exclude from gross income for the fiscal year 1950 the amount of $43,471.33 or any part thereof, the amount deferred by petitioner as unearned income resulting from a “Service Guarantee”; and(2) Whether petitioner is entitled to a bad debt deduction for the fiscal year 1950 in the amount of $14,352.46, which amount was claimed as an addition to a previously nonexistent reserve for bad debts.
FINDINGS OF FACT.
2Cases cited12 opinions
- United States v. AndersonSupreme Court of the United States · 1926
- Automobile Club of Mich. v. CommissionerSupreme Court of the United States · 1957
- Brown v. HelveringSupreme Court of the United States · 1934
- Automobile Club of New York, Inc. v. CommissionerUnited States Tax Court · 1959
- Your Health Club, Inc. v. CommissionerUnited States Tax Court · 1944
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3Cited by8 opinions
- Fountain v. CommissionerUnited States Tax Court · 1973
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- William O. McMahon, Inc. v. CommissionerUnited States Tax Court · 1965
- Fountain v. CommissionerUnited States Tax Court · 1973
- Gunderson Bros. Engineering Corp. v. CommissionerUnited States Tax Court · 1964
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