Ernst v. Commissioner
United States Tax Court
Petitioner, a poultry farmer, made substantial payments in December of each of the taxable years to a grain dealer which thereby became obligated to deliver to petitioner during the succeeding months according to his normal needs the quantities of the specified feeds which the amounts received would pay for at the prices effective on the dates of delivery.
Read the full summary
Petitioner, a poultry farmer, made substantial payments in December of each of the taxable years to a grain dealer which thereby became obligated to deliver to petitioner during the succeeding months according to his normal needs the quantities of the specified feeds which the amounts received would pay for at the prices effective on the dates of delivery. In all years subsequent to the taxable years petitioner made similar payments in December but took delivery in that month of the feed paid for. Petitioner had no right to a return of any of the payments made. Held, such payments are…
1Opinion of the Court
OPINION.
Kern, Judge:
In the instant case, the payments for feed disallowed by respondent were not in the nature of deposits to be reimbursed to petitioner if he decided not to order delivery of the feed or if the grain, dealer would not or could not make such delivery. The payments were absolute and petitioner, who reported his income on a cash receipts and disbursements basis, was irretrievably out of pocket the amounts paid, which amounts were obviously expenses incident to “carrying on a trade or business.” In return for these payments, the grain dealer was unconditionally obligated to…
2Cases cited3 opinions
- Veenstra & De Haan Coal Co. v. CommissionerUnited States Tax Court · 1948
- Cravens v. CommissionerUnited States Tax Court · 1958
- Citizens Federal Sav. & Loan Ass'n v. CommissionerUnited States Tax Court · 1958
3Cited by22 opinions
- E. Keith Owens v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1977
- Packard v. CommissionerUnited States Tax Court · 1985
- R D. And Ida M. Cravens v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1959
- Zaninovich v. CommissionerUnited States Tax Court · 1978
- Stephen A. Keller and Ethel L. Keller v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1984
17 more not listed; retrieve them via the Exa API.