Brooks v. Commissioner
United States Tax Court
A corporation, of which petitioners were transferees, used the reserve method authorized by sec. 166(c), I.R.C. 1954, in computing its bad debt deductions. In August 1969, the corporation sold its assets and liquidated. For each prior year, the corporation had deducted as an addition to its bad debt reserve the amount of its accounts receivable referred to an attorney or agency for collection.
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A corporation, of which petitioners were transferees, used the reserve method authorized by sec. 166(c), I.R.C. 1954, in computing its bad debt deductions. In August 1969, the corporation sold its assets and liquidated. For each prior year, the corporation had deducted as an addition to its bad debt reserve the amount of its accounts receivable referred to an attorney or agency for collection. For its taxable year ended June 30, 1969, it claimed a further addition measured by the discount given the purchaser of its accounts receivable on the sale of its assets. Held, the corporation is not…
1Opinion of the Court
Featherston, Judge:
Respondent determined that each of the petitioners in these consolidated cases is liable as a transferee of A.C. Neely, Inc., for a deficiency in the amount of $10,618.09, plus interest, for the taxable year ended June 30, 1969. Petitioners have conceded that they are liable for the deficiency, if due, but they challenge the correctness of respondent’s determination. The issue is whether respondent erred in his determination that the addition by A.C. Neely, Inc., to its bad debt reserve for the taxable year ended June 30, 1969, was unreasonable and excessive under section…
2Cases cited9 opinions
- Nash v. United StatesSupreme Court of the United States · 1970
- Roanoke Vending Exchange, Inc. v. CommissionerUnited States Tax Court · 1963
- Platt Trailer Co. v. CommissionerUnited States Tax Court · 1955
- Consolidated-Hammer Dry Plate & Film Company, Transferee v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1963
- Bird Management, Inc. v. CommissionerUnited States Tax Court · 1967
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3Cited by5 opinions
- High Plains Agricultural Credit Corp. v. CommissionerUnited States Tax Court · 1974
- Beckley v. CommissionerUnited States Tax Court · 1975
- Brooks v. CommissionerUnited States Tax Court · 1974
- High Plains Agricultural Credit Corp. v. CommissionerUnited States Tax Court · 1974
- Sears Imported Autos, Inc. v. CommissionerUnited States Tax Court · 1992