Lorenz Co. v. Commissioner
United States Tax Court
A taxpayer which in 1942 and 1943 computed its excess profits credit by the income method discontinued a contracting branch of its business in 1929, selling such branch to X. X purchased from it materials and used equipment aggregating in price $ 27,000, charged to an open account on the taxpayer's books, and over the succeeding eight years purchased very large quantities of materials, which were also charged to open accounts.
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A taxpayer which in 1942 and 1943 computed its excess profits credit by the income method discontinued a contracting branch of its business in 1929, selling such branch to X. X purchased from it materials and used equipment aggregating in price $ 27,000, charged to an open account on the taxpayer's books, and over the succeeding eight years purchased very large quantities of materials, which were also charged to open accounts. Payments aggregating $ 281,000 were credited to the accounts. In 1937 the taxpayer charged off and deducted as a bad debt a debit balance of $ 12,000 in the remaining…
1Opinion of the Court
OPINION.
Johnson, Judge:
Petitioner charges respondent with error in computing its base period net income to reflect a full deduction of $19,-688.84 for bad debts in 1937. It contends primarily that the deduction was abnormal in amount, exceeding 125 per cent of average bad debt deductions for the preceding four years by $11,487.41, and suggests rather than argues that $12,373.19 of the deduction, representing the bad debt due from Lorenz, was abnormal in class. The determination of petitioner’s average base period net income requires a computation of its excess profits net income for each year…
2Cases cited7 opinions
- William Leveen Corp. v. CommissionerUnited States Tax Court · 1944
- Harris Hardwood Co. v. CommissionerUnited States Tax Court · 1947
- R. C. Harvey Co. v. CommissionerUnited States Tax Court · 1945
- E. B. & A. C. Whiting Co. v. CommissionerUnited States Tax Court · 1948
- City Auto Stamping Co. v. CommissionerUnited States Tax Court · 1946
2 more not listed; retrieve them via the Exa API.
3Cited by8 opinions
- Denman Tire & Rubber Co. v. CommissionerUnited States Tax Court · 1950
- Lincoln Storage Warehouses v. CommissionerUnited States Tax Court · 1949
- Ramon Brugat v. Secretario de HaciendaSupreme Court of Puerto Rico · 1962
- Denman Tire & Rubber Co. v. CommissionerUnited States Tax Court · 1950
- Lincoln Storage Warehouses v. CommissionerUnited States Tax Court · 1949
3 more not listed; retrieve them via the Exa API.