Argo Sales Co. v. Commissioner
United States Tax Court
T, a corporation, made an application to change its method of accounting in 1985. The change in accounting method required a sec. 481(a) adjustment to income, which, pursuant to Rev. Proc. 85-36, 1985-2 C.B. 434, T was permitted to spread over 6 years. T included one-sixth of the sec. 481(a) adjustment in its corporate income in each of its fiscal years ended Mar. 31, 1986 through 1988. Effective Apr. 1, 1988, T elected to convert to an S corporation.
Read the full summary
T, a corporation, made an application to change its method of accounting in 1985. The change in accounting method required a sec. 481(a) adjustment to income, which, pursuant to Rev. Proc. 85-36, 1985-2 C.B. 434, T was permitted to spread over 6 years. T included one-sixth of the sec. 481(a) adjustment in its corporate income in each of its fiscal years ended Mar. 31, 1986 through 1988. Effective Apr. 1, 1988, T elected to convert to an S corporation. On its S corporation income tax returns for the short year ended Dec. 31, 1988, and the calendar years 1989 and 1990, T included the three…
1Opinion of the Court
OPINION
Raum, Judge:
The Commissioner determined a deficiency in income tax of $75,761 for each of the years 1988, 1989, and 1990. The sole issue before us is whether a section 481(a)1 adjustment is subject to the section 1374 built-in gains tax.
Petitioner, an Ohio corporation, had its principal place of business in Wintersville, Ohio, at the time the petition in this case was filed. It began doing business in 1969, and its business activity during all relevant periods was the retail sale of industrial supplies primarily for use in steel mills and coal mines.
In 1985 petitioner made an…
2Cases cited9 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Knetsch v. United StatesSupreme Court of the United States · 1960
- Jewett v. CommissionerSupreme Court of the United States · 1982
- First Chicago Corporation v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1988
- First Chicago Corp. v. CommissionerUnited States Tax Court · 1987
4 more not listed; retrieve them via the Exa API.
3Cited by3 opinions
- MMC Corp. v. CommissionerCourt of Appeals for the Tenth Circuit · 2009
- Argo Sales Co. v. CommissionerUnited States Tax Court · 1995
- MMC Corp. v. Comm'rUnited States Tax Court · 2007