Akron, C. & Y. R. Co. v. Commissioner
United States Tax Court
Petitioner, in a tax-free reorganization of two railroad corporations, acquired the roadway assets of its predecessors on February 1, 1944. The predecessors had used the retirement method of accounting. Under section 113 (a) (20), Internal Revenue Code, the basis of the properties acquired is the same as the basis of the predecessors on January 31, 1944. Beginning with its first taxable period, petitioner adopted the straight-line depreciation method of accounting.
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Petitioner, in a tax-free reorganization of two railroad corporations, acquired the roadway assets of its predecessors on February 1, 1944. The predecessors had used the retirement method of accounting. Under section 113 (a) (20), Internal Revenue Code, the basis of the properties acquired is the same as the basis of the predecessors on January 31, 1944. Beginning with its first taxable period, petitioner adopted the straight-line depreciation method of accounting. It did not ask for or obtain the Commissioner's permission to use the straight-line depreciation method of accounting. Petitioner…
1Opinion of the Court
OPINION.
HaRkon, Judge:
The Commissioner originally did not question the right of petitioner to use the straight-line depreciation method. He proceeded, in determining the deficiencies, upon the premise that petitioner had the right to use that method. He reduced the basis of the assets acquired from the predecessor corporations by 30 per cent for “depreciation accrued” during the period February 28, 1913, to February 1, 1944. As a result, he decreased the annual deductions for depreciation. He made his determination under section 41 of the Code.
The Commissioner now regards petitioner’s use of…
2Cases cited15 opinions
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- United States v. LudeySupreme Court of the United States · 1927
- Virginian Hotel Corporation v. Helvering, Commissioner of Internal RevenueSupreme Court of the United States · 1943
- Boston & M.R.R. v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1953
- Chicago & NWR Co. v. Commissioner of Internal Rev.Court of Appeals for the Seventh Circuit · 1940
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- Portland General Electric Company v. United StatesDistrict Court, D. Oregon · 1960
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