Warren Co. v. Commissioner
United States Board of Tax Appeals
1. Petitioner, a manufacturer, sold its product through agents under installment conditional sales agreements. Petitioner quoted a "net price" to the agent, who had authority to fix the "selling price," subject to approval by petitioner. The purchaser agreed to pay the selling price to petitioner, and petitioner agreed to pay the agent as his commission the difference between the selling price and the net price.
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1. Petitioner, a manufacturer, sold its product through agents under installment conditional sales agreements. Petitioner quoted a "net price" to the agent, who had authority to fix the "selling price," subject to approval by petitioner. The purchaser agreed to pay the selling price to petitioner, and petitioner agreed to pay the agent as his commission the difference between the selling price and the net price. Payment of a certain part of the agent's commission was to be deferred until collection from the customer was made in full. Petitioner kept its books on the accrual system. Held,…
1Opinion of the Court
*911OPINION.
Black:
Two issues remain for our decision: (1) Whether the respondent erred in increasing petitioner’s income by the excess of the selling price over the net price on all sales made by petitioner’s agents during the taxable years and allowing petitioner as a deduction therefrom only the sales agents’ commissions actually paid during the year, thereby disallowing as a deduction during the respective current taxable year that part of the agents’ commissions which remained unpaid at the end of the year; and (2) whether petitioner is entitled to a credit under section 26 (c) (1) of the…
2Cases cited4 opinions
- Helvering v. Stockholms Enskilda BankSupreme Court of the United States · 1934
- Cochran & Sayre v. United StatesSupreme Court of the United States · 1895
- American National Co. v. United StatesSupreme Court of the United States · 1927
- First National Bank v. Consolidated Lumber Co.California Court of Appeal · 1911
3Cited by1 opinion
- Warren Co. v. CommissionerUnited States Board of Tax Appeals · 1942