Lake Charles Naval Stores v. Commissioner
United States Board of Tax Appeals
1. The Commissioner erred in including note interest for three years in the income for one year where the taxpayer was on an accrual basis. 2. For five years beginning with 1918 the Commissioner allowed deductions for depreciation which were reasonable in amount in the light of what was known during those years. These deductions were at the rate of 20 per cent and were based on a 5-year life for the assets.
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1. The Commissioner erred in including note interest for three years in the income for one year where the taxpayer was on an accrual basis. 2. For five years beginning with 1918 the Commissioner allowed deductions for depreciation which were reasonable in amount in the light of what was known during those years. These deductions were at the rate of 20 per cent and were based on a 5-year life for the assets. In computing the deduction for the six year he properly eliminated from the computation the cost of the assets for the first year. He did not err in making similar adjustments for later…
1Opinion of the Court
*176OPINION.
MtjRdock:
The Commissioner was obviously in error in including $60,000 in the petitioner’s income for 1926 as interest due on notes. The petitioner has proven certain facts in connection with notes of the total face value of $200,000 given by Vizard. It contends that Gillican also gave similar notes and received stock of the face value of $200,000 in connection with the same transaction, but it offered no proof to show that this was true. It argues that there was never any intention that the notes or the interest should be paid, the transaction was a “ simulation,” and the statute of…
2Cited by10 opinions
- Gunderson Bros. Engineering Corp. v. CommissionerUnited States Tax Court · 1964
- Luhring Motor Co. v. CommissionerUnited States Tax Court · 1964
- Burns v. CommissionerUnited States Board of Tax Appeals · 1934
- Western Contracting Corp. v. CommissionerUnited States Tax Court · 1958
- Atlantic Coast Line R. R. v. CommissionerUnited States Board of Tax Appeals · 1934
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