Permanent Homes Land Co. v. Commissioner
United States Board of Tax Appeals
1. ACCRUAL SYSTEM OF ACCOUNTING - WHEN INCOME SHOULD BE ACCRUED. - Amounts agreed to be paid petitioner on account of the cancellation of an old contract and in consideration of further agreements made in a new contract, which amounts are to be paid out of the proceeds of refinancing the property involved in the transactions, are income to petitioner, on the accrual basis, in the year when the obligation to pay petitioner such amounts became definite and fixed.
Read the full summary
1. ACCRUAL SYSTEM OF ACCOUNTING - WHEN INCOME SHOULD BE ACCRUED. - Amounts agreed to be paid petitioner on account of the cancellation of an old contract and in consideration of further agreements made in a new contract, which amounts are to be paid out of the proceeds of refinancing the property involved in the transactions, are income to petitioner, on the accrual basis, in the year when the obligation to pay petitioner such amounts became definite and fixed. Lichtenberger-Ferguson Co. v. Welch, 54 Fed.(2d) 570; Continental Tie & Lumber Co. v. United States,286 U.S. 290. 2. BURDEN OF PROOF.…
1Opinion of the Court
*146OPINION.
Black:
The question we have to decide in this proceeding is whether items of income aggregating $37,285.25 accrued to petitioner in 1926 so as to make them taxable for that year.
For the year 1924 and subsequent years, petitioner kept its accounts and made its income tax returns on the accrual basis. Petitioner contends, in the first place, that the items constituting the $37,285.25 were paid to it in 1926 as advance commissions, and that these commissions were not earned in 1926 and could not be earned until subsequent years and hence could not be properly accrued as income on…
2Cases cited1 opinion
- Continental Tie & Lumber Co. v. United StatesSupreme Court of the United States · 1932
3Cited by6 opinions
- Luhring Motor Co. v. CommissionerUnited States Tax Court · 1964
- Continental Baking Corp. v. CommissionerUnited States Board of Tax Appeals · 1934
- Thompson v. CommissionerUnited States Tax Court · 1971
- Luhring Motor Co. v. CommissionerUnited States Tax Court · 1964
- Permanent Homes Land Co. v. CommissionerUnited States Board of Tax Appeals · 1932
1 more not listed; retrieve them via the Exa API.