Foster Wheeler Corp. v. Comm'r
United States Tax Court
1. Where the payment of royalties which were due to petitioner was prohibited by an order of the Secretary of the Navy, pursuant to the Royalty Adjustment Act of 1942, it was unnecessary to accrue the amount due and report it as income until the dispute was finally settled. 2. Where petitioner's obligation to pay a certain amount was fixed and certain at the end of the taxable year and only the obligee remained to be determined, an accrual of the amount and its deduction…
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1. Where the payment of royalties which were due to petitioner was prohibited by an order of the Secretary of the Navy, pursuant to the Royalty Adjustment Act of 1942, it was unnecessary to accrue the amount due and report it as income until the dispute was finally settled. 2. Where petitioner's obligation to pay a certain amount was fixed and certain at the end of the taxable year and only the obligee remained to be determined, an accrual of the amount and its deduction from gross income was proper for that year.
1Opinion of the Court
OPINION.
Raum, Judge:
The respondent determined the following deficiencies:
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The petitioner contested that determination and alleged that it overpaid its tax for both years. In his pleadings the respondent claimed increased deficiencies for the year 1945. Most of the issues have been settled by the parties and the cases were consolidated for hearing and decision. The remaining issues concern the proper accounting treatment for tax purposes of certain royalties owed to and owed by the petitioner, the payment of which had been prohibited by an order of the Secretary of the Navy,…
2Cases cited4 opinions
- North American Oil Consolidated v. BurnetSupreme Court of the United States · 1932
- Dixie Pine Products Co. v. CommissionerSupreme Court of the United States · 1944
- Commissioner of Internal Revenue v. Boston Elevated Ry. CoCourt of Appeals for the First Circuit · 1952
- Boston Elevated Railway Co. v. CommissionerUnited States Tax Court · 1951
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- George K. Herman Chevrolet, Inc. v. CommissionerUnited States Tax Court · 1963
- Globe Corp. v. CommissionerUnited States Tax Court · 1953
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