Wilson Furs, Inc. v. Commissioner
United States Board of Tax Appeals
1. Where taxpayer, engaged in the retail business, sells garments on an installment payment plan, retaining the garments until paid for in full, and, upon failure of customers to make payment in full, cancels such sales and declares payments theretofore made forfeited, an amount set up on taxpayer's books of account in the taxable year in question as a reserve to meet possible claims for such forfeited deposits held, upon the evidence, not to be an allowable deduction in…
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1. Where taxpayer, engaged in the retail business, sells garments on an installment payment plan, retaining the garments until paid for in full, and, upon failure of customers to make payment in full, cancels such sales and declares payments theretofore made forfeited, an amount set up on taxpayer's books of account in the taxable year in question as a reserve to meet possible claims for such forfeited deposits held, upon the evidence, not to be an allowable deduction in computing net income for the taxable year. 2. Where the consolidated net loss of an affiliated group in 1926 represents the…
1Opinion of the Court
*322OPINION.
McMahon :
The petitioner, Wilson Furs, Inc., contends that the account designated “Reserve for Forfeited Deposits ” is truly a liability account, that the cancellation of sales and forfeiture of deposits were made without the consent of the customer, and that should the customer thereafter demand the refund of the deposit, the petitioner would be obliged to (1) refund the deposit, (2) give credit for same on sale of another garment, or (3) issue a credit slip to be applied against a future sale; and that therefore the sum of $3,000 should be treated as a liability and not as income.
The…
2Cases cited11 opinions
- Woolford Realty Co. v. RoseSupreme Court of the United States · 1932
- United States v. Magnolia Petroleum Co.Supreme Court of the United States · 1928
- Delaware & Hudson Co. v. CommissionerUnited States Board of Tax Appeals · 1932
- Ostheimer v. CommissionerUnited States Board of Tax Appeals · 1924
- Albert Leon & Son, Inc. v. CommissionerUnited States Board of Tax Appeals · 1933
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3Cited by2 opinions
- J. J. Little & Ives Co. v. CommissionerUnited States Tax Court · 1966
- Wilson Furs, Inc. v. CommissionerUnited States Board of Tax Appeals · 1933