New York Water Service Corp. v. Commissioner
United States Tax Court
Petitioner, on the accrual basis of reporting income and on the reserve system of accounting for bad debts, filed claim for refund of its 1941 tax payments on the basis that it was entitled to deduct the amount of $ 475,000, covering an open loan account, as an addition to its reserve for bad debts in this year. The Commissioner disallowed the claim in full.
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Petitioner, on the accrual basis of reporting income and on the reserve system of accounting for bad debts, filed claim for refund of its 1941 tax payments on the basis that it was entitled to deduct the amount of $ 475,000, covering an open loan account, as an addition to its reserve for bad debts in this year. The Commissioner disallowed the claim in full. The Commissioner also included in petitioner's income for 1941, 1942, and 1943 unpaid interest due on the same open loan account in these years. On the facts, held, that petitioner is not entitled to the deduction of $ 475,000 or any part…
1Opinion of the Court
OPINION.
Hill, Judge-.
There are two principal questions for our determination in this case. First, we must decide whether petitioner was entitled under section 23 (k) (1) of the Internal Revenue Code,2 as amended, to deduct as a reasonable addition to its reserve for bad debts for the year 1941 the sum of $475,000 or any lesser amount to cover the open account indebtedness of South Bay to petitioner. Secondly, we must consider whether petitioner was required to accrue and report as income for the taxable years 1941,1942, and 1943 unpaid interest due on its open account with South Bay in the…
2Cases cited5 opinions
- State ex rel. Southwestern Bell Telephone Co. v. Public Service Commission of MissouriSupreme Court of the United States · 1923
- Consolidated Rock Products Co. v. Du BoisSupreme Court of the United States · 1941
- Group of Institutional Investors v. Chicago, M., St. P. & P.R. Co., and 9 Other CasesSupreme Court of the United States · 1943
- Shield Co. v. CommissionerUnited States Tax Court · 1943
- Houston Chronicle Publishing Co. v. CommissionerUnited States Tax Court · 1944
3Cited by32 opinions
- Riss v. CommissionerUnited States Tax Court · 1971
- Duttenhofer v. CommissionerUnited States Tax Court · 1967
- Estate of Guy L. Mann, Deceased. Suzanne Mann Duval, Administratrix v. United StatesCourt of Appeals for the Fifth Circuit · 1984
- James A. Messer Co. v. CommissionerUnited States Tax Court · 1972
- Perry v. CommissionerUnited States Tax Court · 1954
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