Falstaff Beer, Inc. v. Commissioner
United States Tax Court
Held, that payments made by the petitioner, a distributor of beer, to a predecessor distributor pursuant to a contract, executed at the time of acquisition of the petitioner's distributorship, providing for the payment of 3 cents per case of beer sold until a specified sum had been paid, did not constitute deductible ordinary and necessary business expenses but expenditures in the nature of capital outlays.
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Held, that payments made by the petitioner, a distributor of beer, to a predecessor distributor pursuant to a contract, executed at the time of acquisition of the petitioner's distributorship, providing for the payment of 3 cents per case of beer sold until a specified sum had been paid, did not constitute deductible ordinary and necessary business expenses but expenditures in the nature of capital outlays. Held, further, that since there is no showing that the benefits to be derived for the payments were for a definite or limited period, such payments may not be amortized and deducted under…
1Opinion of the Court
Atkins, Judge:
The respondent determined deficiencies in income tax as follows:
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The only issue for decision is whether payments made by the petitioner to a predecessor distributor of beer are deductible as ordinary and necessary business expenses.
FINDINGS OF FACT.
Some of the facts have been stipulated and the stipulations are incorporated herein by this reference.
The petitioner is a Texas corporation organized on October 29, 1953. It filed its income tax returns for the years involved with the director of internal revenue, Austin, Texas. During the years in question, it was…
2Cases cited10 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Lyeth v. HoeySupreme Court of the United States · 1938
- McDonald v. CommissionerSupreme Court of the United States · 1944
- Raytheon Production Corp. v. Commissioner of Int. Rev.Court of Appeals for the First Circuit · 1944
- Snow v. CommissionerUnited States Tax Court · 1958
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- Maier Brewing Co. v. CommissionerUnited States Tax Court · 1987
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