Applied Communications, Inc. v. Commissioner
United States Tax Court
P began as a custom computer software business and, based upon its accountant's recommendation, reported its income (derived mainly from services) on the cash method of accounting for financial and tax purposes. Two years later when P began selling hardware, it reported hardware income on the accrual method of accounting for financial and tax purposes, without changing from the cash method for its software generated revenue.
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P began as a custom computer software business and, based upon its accountant's recommendation, reported its income (derived mainly from services) on the cash method of accounting for financial and tax purposes. Two years later when P began selling hardware, it reported hardware income on the accrual method of accounting for financial and tax purposes, without changing from the cash method for its software generated revenue. Several years later P, for financial purposes, changed to the accrual method for reporting its software generated income. At about the same time P's business was…
1Opinion of the Court
APPLIED COMMUNICATIONS, INC., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Applied Communications, Inc. v. Commissioner
Docket No. 5449-87
United States Tax Court
T.C. Memo 1989-469; 1989 Tax Ct. Memo LEXIS 469; 57 T.C.M. (CCH) 1473; T.C.M. (RIA) 89469;
August 30, 1989
P began as a custom computer software business and, based upon its accountant's recommendation, reported its income (derived mainly from services) on the cash method of accounting for financial and tax purposes. Two years later when P began selling hardware, it reported hardware income on the accrual method of…
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