Chatham & Phenix Nat'l Bank v. Commissioner
United States Board of Tax Appeals
Bank discount neither received nor accrued within the taxable year does not constitute income for that year. A bank which, by the method of bookkeeping employed, includes in income discount neither received nor accrued within the year, should be permitted to change its method of accounting so as to correctly reflect its income, and proper adjustments should be made in the returns for prior years not barred by the statute.
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Bank discount neither received nor accrued within the taxable year does not constitute income for that year. A bank which, by the method of bookkeeping employed, includes in income discount neither received nor accrued within the year, should be permitted to change its method of accounting so as to correctly reflect its income, and proper adjustments should be made in the returns for prior years not barred by the statute. All amounts which constitute income within the year under the method of accounting employed must be returned for taxation in that year, even though a part thereof was…
1Opinion of the Court
*462OPINION.
Marquette :
In income taxation there are two recognized methods of accounting employed to reflect income; one called the cash receipts and disbursement basis in which income is reported when either actually or constructively received, and the other known as the accrual basis, in which income is reported when due, in the sense of owing, although it may be payable in the future.
The taxpayer herein has always kept its books upon the basis of cash receipts and disbursements with the exception of discount on time loans. Prior to January 1, 1918, it was its practice with respect to such…
2Cases cited5 opinions
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Doyle v. Mitchell Brothers Co.Supreme Court of the United States · 1918
- Chicago, Burlington & Quincy Railroad v. HarringtonSupreme Court of the United States · 1916
- Stratton's Independence, Ltd. v. HowbertSupreme Court of the United States · 1913
- Douglas v. EdwardsCourt of Appeals for the Second Circuit · 1924
3Cited by16 opinions
- Drazen v. CommissionerUnited States Tax Court · 1960
- Luhring Motor Co. v. CommissionerUnited States Tax Court · 1964
- Reynolds Cattle Co. v. CommissionerUnited States Board of Tax Appeals · 1934
- Carlins v. CommissionerUnited States Tax Court · 1988
- Chemung Canal Trust Co. v. CommissionerUnited States Board of Tax Appeals · 1934
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