Black Motor Co. v. Commissioner
United States Board of Tax Appeals
1. Respondent's determination disallowing a portion of the amount claimed by petitioner as an addition to its reserve for bad debts approved. 2. In 1928 petitioner's board of directors fixed the salary of its general manager, which action was not thereafter rescinded. In the taxable year the manager drew $1,500 less salary than that fixed. This amount was not accrued on petitioner's books and was not deducted in its 1936 return.
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1. Respondent's determination disallowing a portion of the amount claimed by petitioner as an addition to its reserve for bad debts approved. 2. In 1928 petitioner's board of directors fixed the salary of its general manager, which action was not thereafter rescinded. In the taxable year the manager drew $1,500 less salary than that fixed. This amount was not accrued on petitioner's books and was not deducted in its 1936 return. In a subsequent year the back salary was paid by petitioner's wholly owned subsidiary, which it charged to petitioner on its books. Held, under the facts here…
1Opinion of the Court
*303OPINION.
ARnold :
The first issue is to be determined under section 23 (k) of the Revenue Act of 1936, which authorizes the petitioner to deduct “Debts ascertained to be worthless and charged off within the taxable year (or, in the discretion of the Commissioner, a reasonable addition to a reserve for bad debts) ; * * *”
In this proceeding the respondent, in the exercise of his sound discretion, determined that $79,332.24 represented a reasonable addition to petitioner’s reserve for bad debts for the taxable year. The petitioner offers no proof to support its contention that $94,680.87 is the…
2Cited by76 opinions
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- Valmont Industries, Inc. v. CommissionerUnited States Tax Court · 1980
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