Mill Factors Corp. v. Commissioner
United States Tax Court
Petitioner was engaged in the factoring business, which consisted in purchasing accounts receivable and making loans on inventories to firms engaged in the textile industry. Petitioner had adopted the reserve method of treating bad debts. Upon the evidence, the amount of a reasonable addition to the petitioner's reserve for bad debts is determined.
1Opinion of the Court
OPINION.
Black, Judge-.
The issue herein is whether petitioner is entitled to a deduction from gross income for the year 1942 in the amount of $161,353.83 as an addition to its reserve for bad debts. Petitioner’s assignment of error claimed that the deduction should be $164,475.34, but now claims that it should be $161,353.83. Section 23 (k) (1) of the Internal Revenue Code1 permits a taxpayer, at the Commissioner’s discretion, to make a reasonable addition to its reserve for bad debts in lieu of deducting debts which become worthless within the taxable year. What is a reasonable addition to…
2Cases cited1 opinion
- Houston Chronicle Publishing Co. v. CommissionerUnited States Tax Court · 1944
3Cited by4 opinions
- Wengel, Inc. v. United StatesDistrict Court, E.D. Michigan · 1969
- Beneficial Corp. v. United StatesUnited States Court of Claims · 1985
- Mill Factors Corp. v. CommissionerUnited States Tax Court · 1950
- Sears Imported Autos, Inc. v. CommissionerUnited States Tax Court · 1992